Managing employee retention and turnover with 21st century ideas

Final Research-Based Report

Adapted from Previous Student Paper

WRTG 394

March 10, 2019

Information, Tickets & Travel 7383 N Litchfield Rd Building 1150 Room 1038 Luke AFB, AZ 85309

(623) 856-6000

Mrs. Joyce Smith NAF Human Resources Director Luke Air Force Base 7383 N Litchfield Rd

Bldg. 1150 Room 1179 Luke AFB, AZ 85309

Dear Mrs. Smith:

Enclosed is the report “Improving Employee Retention and Turnover Rates” that you requested in response to my proposal memo that was given to you earlier this month. This report will address the areas that need attention in an effort to improve employee retention rates and reduce turnover. The report contains substantial evidence from various sources that will back up my argument. My hope is to potentially save us thousands of dollars each year in wasted training dollars and reduce the stress levels of the current staff members who have to continually train new staff members.

I greatly appreciate your time taken to read this report, and I hope that it will be of use to you in your future decision-making processes for the Information, Tickets and Travel office. Sincerely,

Sharon Jones

Sharon Jones Travel Agent and Ticket Sales

TABLE OF CONTENTS

Executive Summary……………………………………………………………….. 1

Introduction Background…..…………………………………………………………….. 2

Purpose……………………………………………………………………… 2

Overview of Methodology………………………………………………….. 2

Findings and Discussions

Employee Retention and Turnover Rates ………………………………….. 3 Management impact on retention and turnover rates………………………. 3

The impact of job satisfaction and development …………………………... 4

Employee Retention Programs……………………………………………... 5

Conclusion………………………………………………………………………….. 5 Recommendations …………………………………………………………………. 6 References………………………………………………………………………….. 7 Appendix A: Employee Retention Survey ………………………………………… 9 Appendix B: Employee Retention Survey Results ………………………………... 10

Executive Summary Purpose and method of this report The Information, Ticket and Travel office has seen two valued employees resign in the past three weeks and several over the past year. These resignations have created unfavorable working conditions due to an inadequate level of staffing and an immense amount of stress for the remaining employees.

I have distributed an employee survey that addresses the following:

· employee retention incentives

· employee longevity with the company

Primary research was conducted at the Luke Air Force Base Information, Tickets and Travel Office. Six of the current associates were administered an identical survey with five questions on the topic of what makes them come to work each day and what the strengths and weaknesses are of management. The results of these surveys help demonstrate what the staff finds most important regarding employee retention and how well the manager is doing at making employees feel valued.

Secondary research was conducted from a variety of scholarly written journals and books.

Findings and Conclusions

The results of this survey should show that employee job satisfaction is lacking among workers of the millennial generation.

Recommendations

Recommendations to improve employee retention and reduce stress include:

· creating a revised retention program directed toward the needs and preferences of millennials

· offering training that fosters the potential for growth, particularly targeted for millennials

Introduction Background The Luke AFB Information, Tickets, and Travel Office has experienced the resignation of two employees in the last few weeks and several employees over the past year. The high level of turnover among employees is proving to be detrimental to the staff members, as they have to retrain new staff. The Information, Tickets, and Travel office at Luke Air Force Base sells over two million dollars of tickets and other travel merchandise each year. A stable, well-trained workforce is necessary to maintain such a high volume of sales. As one of the top military travel offices in all of the United States, we need to keep turnover low and employee retention high. Purpose The purpose of this study was to address the concerns that the employees have regarding job satisfaction and development and determine what will keep our staff loyal to us. This information will help us create a climate of higher retention among employees.

Overview of Methodology

The following methods were used to determine what is most effective in improving employee retention rates and limiting turnover:

· conducted secondary research to help support the notion that employee retention rates and turnover rates can be improved.

· surveyed current employees to determine their feelings about current efforts being made to retain their employment.

· analyzed the survey results to see what employees currently feel are our strong suits and what improvements can be made with regard to employee retention.

Findings and Discussion

Employee Retention and Turnover Rates

From the research completed in perusing a myriad of scholarly and trade journal sources, all of which cover the phenomenon of employee retention and turnover rates, it is clear that there is a fine line that keeps employees coming back to work, week after week, with ambitious goals and a passion to excel. A few factors that are discussed in the literature include the impact management can have if given the freedom to implement change, job satisfaction and development, and solid retention programs.

Management impact on retention and turnover rates

There are countless studies out there to support the notion that management can make or break a company in many aspects, but especially when it comes to employee retention and turnover rates. When talking about turnover rates and employee retention, it is imperative to understand how exactly they are measured. According to the Saratoga Institute, “Turnover is calculated as the number of employee terminations in a given period—voluntary, involuntary or both—divided by the average number of active employees during the same period” (as cited in Waldman & Arora, 2004). Employee retention is measured by examining individuals in different job groups and measuring how long they stay at their jobs (Waldman & Arora, 2004).

In addition, the cost of employee turnover can be significant to any organization. According to Kepner-Tregoe, Inc. (as cited in “To conquer turnover, first calculate its true impact”), to calculate the cost of employee turnover, one would multiply the wage of the position by 130% (in order to include the cost of benefits) and then multiply the result by 25%. “This cost per employee may then be multiplied by the number of ex-employees [from this position]…to arrive at the total cost of turnover in this position” (“To conquer turnover, first calculate its true impact,” p. 8).

Essentially, employee retention is defined as how much of an effort an employer makes to keep valued staff on the payroll and turnover is defined as valued employees that voluntarily leave (Frank, Finnegan, & Taylor, 2004). “If employees have problems with their managers, their probability of leaving the organization increases dramatically, since day-to-day contact has a profound impact on staffing” (Abrams, n.d.).

Much of the literature regarding management techniques and the impact they had on employee retention and turnover rates agreed that open, two-way communication and trust were the biggest contributing factors to success in both areas (Taplin & Winterton, 2007). Fortunately, our manager, Lizbeth, is phenomenal, and she effectively utilizes the two-way communication and trust factors on a daily basis. Unfortunately, she is bound by unrealistic staffing levels and no say on creating new positions that allow room for growth. Currently, there are only two tiers of employee levels before you hit management and only one management position open. Implementing supervisor titles to go along with the more complex duties that some of the employees are already doing would be an impactful start. If Lizbeth were allowed a little more freedom in these areas, it would make huge improvements because, aside from the impact the manager as a person contributes, the actual job satisfaction itself and development opportunities also play an enormous role in the rates of employee retention and turnover rates.

The impact of job satisfaction and development on employee retention and turnover rates

Upon further examination of the literature, it was clear that another key point impacting employee retention and turnover rates lead back to job satisfaction and development. “The first step in decreasing turnover is understanding why your employees leave” (Jardine & Amig, 2001). Making this accomplishment more difficult is the fact that “employees are reminding us that the heart is a tougher battlefield than the mind” (Frank, Finnegan, & Taylor, 2004). In today’s times, employers are dealing with both older generations and younger generations who have very different mindsets in what they desire from their jobs.

I created and conducted an in-person survey on February 28, 2019, with the current staff, which as you know, includes both millennials and baby boomers. The information I gathered correlates quite well with the research that proclaims that, when referring to older generations, job satisfaction is at the top of their list of reasons to stay employed by a particular company, but, when referring to millennials, their focus is more on development (Lee, Hom, Eberly, & Li, 2018). Everyone who responded to the survey agreed that the management provided good two-way communication, but they also agreed that they were not happy with their current promotion plan and career path. Appendix A shows the survey provided to each employee and Appendix B shows the answers of each employee surveyed broken down by age groups. The millennials do not see themselves still being employed here in one year, but the baby boomers do because they need the stability at their age. The millennials have no problem moving on to other jobs that give them the purpose and development path they are seeking.

Living in a time when two very different generations have to learn to coexist in the workforce poses an immense pressure for employers to find a happy medium for both. According to a study done by Gallup, (1) millennials want a purpose, not just a paycheck, (2) millennials are not just looking to be satisfied by their job but are looking for career development; (3) millennials want to be coached through things, not bossed around or micromanaged; (4) millennials want conversations with meaning on a regular basis, not just annual reviews; (5) millennials want to focus on their strengths, not their weaknesses; and (6) millennials are not looking at work as their job, but more so that it represents their life (n.d.).

Baby boomers, on the other hand, have a different mindset. At this point in time, they are focusing more on job satisfaction and maintaining their employment in an effort to secure their health and retirement benefits. According to Allison Bell of the National Underwriter, “…a good benefits package can be critical to efforts to retain boomer employees” (2005). Starting over with sick time and vacation time is not something that people take lightly. While being fully vested in a company’s retirement plan is important, if the need to be fully vested in a retirement plan represents the only reason for staying at a job, then the quality of work among employees generally suffers (Lee, Hom, Eberly, & Li, 2018).

Ultimately, a manager cannot throw money at his or her employees in an effort to maintain feasible retention rates (Mitchell, Holtom, Lee, 2001). Stress levels are high when the employees who remain loyal continually have to retrain new staff members. We sell more than three hundred different tickets with almost as many different vendors. It is impossible to train staff quickly due to the nature of our line of work. In addition, when staff levels dwindle, it is imperative that a solution be created to lessen those stressful times. I genuinely believe that if job satisfaction and development were addressed, and revisions were made that included room for growth and the options for benefits after a certain period of time, then our retention rates would drastically improve and our turnover rates would decrease exponentially.

Employee retention programs

Much of the literature literature documents the success of employee retention programs. “Employee retention programs are made up of a variety of components. Each of these components must work together in a systematic method to achieve the goal of retaining employees” (Gillies, 2000). In the various programs mentioned, the most successful efforts were found in compensation reviews, employee surveys, easier access to communication with upper management, and scheduling that allows for flexibility (Abrams, n.d.). Additionally, employers also have to combat economic fluctuations in regards to turn over and employee retention (Frank, Finnegan, & Taylor, 2004).

Lizbeth does a wonderful job making sure that we are able to have two-way conversations with her, but the management levels above her do not make themselves available for us to discuss workplace grievances that are beyond her control. When employees know that their pay will increase with a positive compensation review, this information gives them something to work hard for. Our office makes enough money to float three other operations on the base that would not be able to remain open without our existence. If Lizbeth were granted more funds to be used in-house for items such as compensation, then I believe the tempo would change in regard to turnover rates. Keeping employees willingly engaged in the betterment of their work performance is a difficult task for any employer. This dynamic is apparent by all of the studies that have been done in response to retention rates and employee turnover. Because we are on a military base, there are unique hurdles that we must face with the number of employees who have to leave due to permanent change of duty stations. If we can cultivate a retention plan that appeals to the masses, and allow employee input, then we could see a drastic change in retention rates and lessen turnover. This improvement would save the government thousands in wasted training dollars each year.

Conclusion

The literature reviewed on employee retention and turnover rates shows that there are innumerable factors that play into measuring the effectiveness of various efforts. While there is no infallible method on determining what works best for all companies as a whole, it is apparent that we can look within their own walls to determine what is the best course of action to keep highly productive and engaged employees loyal to the Information, Tickets and Travel Office at Luke Air Force Base. The results of my survey corroborate with the literature in indicating opportunities for improving retention in our organization.

Recommendations

My recommendation to mitigate the problem of the turnover of valued employees and improving retention rates would be to take the following steps:

1. allow more room for growth and further development by opening up supervisor positions.

2. implement a retention incentive that would offer full-time positions for employees that are performing well and have been employed for at least six months.

References

Abrams, M. (2002). Back to basics 1. Employee retention and turnover: Holding managers accountable. Trustee: The Journal for Hospital Governing Boards, 55(3), 15–18. Retrieved from https://www.journalguide.com/journals/trustee-the-journal-for-hospital-governing-boards

Bell, A. (2005). To raise boomer retention, firms may have to update benefits. National Underwriter Life & Health, (44), 37. Retrieved from https://www.nationalunderwriter.com

Frank, F. D., Finnegan, R. P., & Taylor, C. R. (2004). The race for talent: Retaining and engaging workers in the 21st century. Human Resource Planning, 27(3), 12–25. Retrieved from https://journals.aom.org/

Gallup, Inc. (n.d.). How Millennials Want to Work and Live. Retrieved from https://www.gallup.com/workplace/238073/millennials-work-live.aspx

Gillies, B. (2000). A Comprehensive Approach to Reducing Turnover. San Diego Business Journal, 21(41), 22. Retrieved from https://www.sdbj.com/

Jardine, E., & Amig, S. (2001). Managing human Capital. Behavioral Health Management, 21(2), 22. Retrieved from https://www.worldcat.org/title/behavioral-health-management/oclc/29851428

Lee, T. W., Hom, P., Eberly, M., & Li, J. (Jason). (2018). Managing employee retention and turnover with 21st century ideas. Organizational Dynamics, 47(2), 88–98. doi:10.1016/j.orgdyn.2017.08.004

Mitchell, T. R., Holtom, B. C., & Lee, T. W. (2001). How to keep your best employees: Developing an effective retention policy. Academy of Management Perspectives, 15(4), 96–108. doi:10.5465/ame.2001.5897929

Taplin, I. M., & Winterton, J. (2007). The importance of management style in labour retention. International Journal of Sociology and Social Policy, 27(1/2), 5–18. doi:10.1108/01443330710722724

To conquer turnover, first calculate its true impact. (2019). HR Specialist, 8. Retrieved from https://www.thehrspecialist.com/

Waldman, J. D., & Arora, S. (2004). Measuring retention rather than turnover: A different and complementary HR calculus. Human Resource Planning, 27(3), 6–9. Retrieved from https://journals.aom.org/

Appendix A: Employee Retention Survey 1. What is your age? __________ 2. I feel like I am able to reach my full potential at the Information, Tickets and Tours office?

a. Yes b. No 3. I am happy with my current promotion plan and career path? a. Yes b. No

4. Does management do a good job providing two-way communication?

a. Yes b. No 5. Are the current benefits a reason to stay with the company? a. Yes b. No

6. Do you see yourself working here in 1 year?

a. Yes b. No

Appendix B: Results of the Survey Baby boomers’ responses were consistent 1. 67, 68 2. A., A. 3. B., B. 4. A., A. 5. A., A. 6. A., A. Millennial responses were consistent

1. 24,25,28,29 2. B., B., B., B. 3. B., B., B., B. 4. A., A., A., A. 5. B., B., B., B. 6. B., B., B., B.

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