Retaining Walls

On March 6, 2013, in HR Trends, HRExaminer, by John Sumser

Retaining Walls - by John Sumser - HRExaminer

Layoffs happen because the efforts to keep the workforce trimmed didn’t work.

Why do we have layoffs? One counter-intuitive answer is “because retention programs work.” Layoffs happen because the efforts to keep the workforce trimmed didn’t work. Attrition wasn’t high enough. The right people did not leave of their own accord.

Hiring and Keeping the Best People is a standard goal in most organizations. Identifying key talent and promoting them is such a core part of conventional wisdom that we take it for granted. Most leaders aspire to be surrounded by trusted colleagues who are well seasoned and deeply experienced.

When this idea spreads through an organization, it is called “Retention”. In a harsher light, it is the essence of cronyism and featherbedding.

Is it really a sound business practice?

Good, strategic workforce planning is virtually nonexistent. Instead of accurately knowing and describing the specifics of our workforces, we rely on tired generalizations. We want to manage attrition down and become the “employer of choice”. In other words, our HR Departments lead us down the primrose path and make our organizations home to people who retire in place.

It should be no surprise that we have downturns. Preparing for them, hiring wisely and continually pruning the organization is the right way to approach the problem. Too few hands always leads to greater productivity.

Time and again, our organizations act surprised when the downturn . RIFs mean that we “hired too many people”. Said another way, “We didn’t let enough people go when times were good.” Retention and retention programs, therefore, are the primary cause of RIFs.

“Why do we have layoffs?” Because the retention programs work too well. The idea that great people  should be retained in their jobs for a long time is the exact opposite of growth and innovation. Retention breeds seniority and bureaucracy. Innovation requires youth and inexperience.

  • Layoffs are not a result of retaining too many people. Layoffs are a result of bad business decisions and poor lazy management. There are downturns and we should plan for them, but layoffs are not a requirement in a downturn. Using temporary workers, re-shuffling resources to higher growth areas, and realizing that the right people will create profits rather than reduce them are a few of the many possible solutions.

  • Edward N. Woycenko

    Retaining your top people should be a priority for every company – 90% of the business is done by 10% of the people. When you embrace the concept of topgrading, which by the way takes a commitment to excellence and hard work, you have a constant infusion of new ideas and techniques by the top producers who are being recruited to your organization. Failure to constantly be seeking top talent results in mediocrity, a condition a lot of companies seem to be satisfied with.

  • ” Innovation requires youth and inexperience” Say what? That’s an absolutely ridiculous and naive statement. I work in the digital/online industry where it’s laden what mostly “youth and inexperience” and I can tell you that much of the innovation is not driven by the youth or inexperienced. Innovation is mainly driven by necessity and it’s often driven by experienced people (oftentimes older people) who have identified a need or a solution to a problem that ONLY an experienced person would understand. Of course there are exceptions, especially in the Internet/technology space that are highly visible like Facebook. The correlation of youth and especially inexperience to innovation simply does not exist.

  • I agree. Also, if companies were to begin shedding its most experienced and oftentimes top performers as a general business practice, no right-minded, talented person would ever consider working there, which would create a whole set of new talent problems for the company.

  • Excellent post, John. And Ray… I agree… The focus should not be on employee retention – it should be on the right employee retention – are you keeping the ones you want to keep? Better yet – are you getting rid of the dead weight you would not hire again?

  • Insightly response!

  • I like the phrase, “right employee retention”….it more clearly defines effective retention vs. retention…

  • I love the comments and discussion. What pains me in reading this is that the overriding answer is more sophisticated management, which in my experience barely exists!

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  • “Good, strategic workforce planning is virtually nonexistent.” – true, but there is a growing interest in the field, and organizations are at least understanding the criticality of having Strategic Workforce Planning in their organizations (according to the Boston Consulting Group). The challenge is that there are not enough HR professionals trained in the techniques. I think this will continue to improve over time as people recognize that Strategic Workforce Planning not only aligns the workforce strategy to the business strategy, but can dramatically increase the ROI of Talent Management programs by uncovering trends and patterns that wouldn’t otherwise be apparent.

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