In the tug of war of talented new people accounting and finance leaders can lose sight of the importance to retain skilled people and overlook the quality of the employees who are right under their noses.
Joseph Kehoe, senior vice president of financial management at the Republic Bank of Chicago says the environment for top talent has become tougher. One solution to avoid the war for talented individuals is to hire the right individual into an entry-level position and groom them for advancement.
Sue Taylor, chief financial officer at Facebook, believes employee retention is as equally important as recruitment.
“Facebook is a strengths-based organisation, which means that we want people in roles that they are both good at doing and that they enjoy,” she said. “Both of these are key elements of achieving fulfillment at work.”
It is also easy to lose sight of the cost of employee turnover, says Angela Pronto, assistant controller at LogRhythm Inc. in Colorado. “New employees cost a lot of money—plain and simple. You have to find ways to grow the business and grow your people. Keep them engaged, and reward them with benefits, bonuses, and raises.”
Research by the US-based Society for Human Resource Management (SHRM) suggests that direct replacement costs can be as high as 50%-60% of an employee’s annual salary, with total costs associated with turnover ranging from 90% to 200% of annual salary. Examples include turnover costs of $102,000 for a journeyman machinist, $133,000 for an HR manager at an automotive manufacturer, and $150,000 for an accounting professional.
And according to the SHRM, compensation and pay satisfaction “are relatively weak predictors of employees’ decisions to leave,” and offering pay increases or bonuses “may not be the most efficient way to address retention.”
Employee retention starts with first being able to clearly articulate what the organisational culture is. What are the aligned values, beliefs, behaviors, and experiences that make up the organization’s environment?
Hiring employees that don’t mesh well with the existing or desired company culture leads to poor work quality, decreased job satisfaction, and a potentially toxic environment. This results in turnover which has high costs—both hard and soft.
Here are five other strategies from Joseph Kehoe, Angela Pronto, and Sue Taylor that can help controllers, CFOs, and other accounting and finance leaders take the tension out of retention:
- Invest in training. Work with your employees and train them the way you were trained, Kehoe said. “You’ve been successful in your career for a reason; this is the opportunity to pass it on,” he added.
- Make communication clear about how employees can grow into their next role. “Find out from them what they want that next role to be,” Pronto said. “Attempt to fit that into your team structure as you grow.”
- Provide the resources employees need to do their jobs well. And actively remove any roadblocks that hinder their success, Taylor said.
- Don’t be skimpy on praise and recognition. “Tell employees regularly they are doing a good job and that you appreciate them,” Pronto said. And provide opportunities for employees to shine and impress senior management, Kehoe added. “You want to make sure your employees are recognised for what they offer the company,” he said. “This will make them feel more a part of the organization and that what they do matters.”
- Show care by understanding what is most important for each person’s experience at the company. “Building a strong community at work should be a company-wide effort, and leaders across various organisations should work collaboratively on this,” Taylor said. “That said, leaders and managers play an important role in defining the experiences employees have every day.”