How do you keep talent on board?
KPMG has a talent for retaining young recruits
All businesses strive to recruit the best people, often looking far and wide to find that perfect talent. Yet much less attention is paid to the task of keeping that talent on board and preventing it from straying to rivals. For Marc Van Hoecke, Human Resources Director at professional services and auditing giant KPMG, that seemed a curious oversight, so six years ago he contacted Vlerick’s Centre for Excellence in Career Management (CECM) looking for a better analysis of why people quit. The answers, he found, were eye-opening.
“Six years ago, I found that the correlation between success in hiring and success in business was too weak,” says Van Hoecke. “Although KPMG invests a lot in introducing and training the 100 to 150 young people it hires every year, it was sometimes more difficult to retain them. Too many were leaving the company within two to three years.” Van Hoecke discovered that Vlerick’s CECM had a way of measuring this phenomenon, so together they developed a process to understand new employee concerns, and respond to them.
“We want to avoid the ‘Blue Monday’ syndrome, when someone leaves the company without saying anything. If that happens, as an organisation, as a coach and as an HR manager, you have failed,” he says. From a business point of view, losing employees costs money. Replacements cost between 60 to 120% of one year’s salary, while indirectly costing customers and contacts, experience, team morale, continuity and reliability.
Vlerick and the CECM researched the issue through surveys on the psychological contract of new hires. The recruits would fill in a questionnaire on their first day at KPMG, which would ask about their expectations on seven issues: job content; career development; training; social atmosphere, compensation and benefits; work-life balance; and job security. This established the so-called psychological contract, the implicit contract between employee and employer that is normally never formalised or openly discussed but balances what has been promised and what is delivered.
Scene for transparency
Veroniek De Schamphelaere, a manager at Vlerick, who led the research project at KPMG: “Research shows that when employees leave companies, it's often because of a breach of the psychological contract: promises were not lived up to later on. Companies consciously or unconsciously create those perceptions but fail to explicitly address them. The questionnaire sets the scene for transparency.”
This is repeated after nine months to see whether each side is living up to their commitments. De Schamphelaere: “Employees have often adjusted their ideas by then. And if a company sees a gap between its expectations and reality, an open conversation can serve as input for individual coaching.”
This has helped KPMG to better understand employee concerns and respond to them – with impressive results. Van Hoecke: “The bottom line is that recruitment turnover has fallen from 22% in 2007 to 13% today. Now we can zoom in on particular areas of concern and optimise individual coaching.”
Four tips for an efficient retention process
- Meet the demands of the new generation of recruits. Van Hoecke: “We found that the social atmosphere, good corporate social responsibility policies and green credentials have become more important.”
- Create an open atmosphere. Van Hoecke: “At KPMG, we've become more open and more informal to match the new generation.”
- Start the retention process on day one by drawing up a psychological contract.
- Evaluate the psychological contract on a regular basis. Van Hoecke: “We have lots of opportunities for discussion and feedback. Sometimes employees find our working environment isn't their cup of tea. Fair enough, but at least we've given them a chance to talk about it openly.”
Centre for Excellence in Career Management
The Centre for Excellence in Career Management (CECM) is one of Vlerick’s HR research branches and was established in 2003 to address career management issues within its member organisations. Veroniek De Schamphelaere: “The centre is a consortium of companies, researchers and academics. We have leading-edge research teams and set up applied research projects on how to identify and foster talent. By focusing on ways to provide attractive career perspectives and offering the right career support for different target groups of employees, organisations can leverage their image as an attractive employer for future employees whilst enhancing the commitment of current employees.”
The CECM organises workshops, seminars and joint projects with its members. It also develops both quantitative and qualitative tools. “These tools allow for a customised application within each company, which is definitely of added value to the members,” says De Schamphelaere.
The CECM has a Prime Foundation Partner (Hudson), a Media Partner (Vacature), and 11 members (Belgacom, Electrabel, Eandis, IKEA, ING, KPMG, Randstad Belgium, StartPeople, Tessenderlo Group, Vito and VF Europe).
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