5 minute read 21 Jan 2020
Communicating every detail

Is a strategic retention policy an exclusive HR task?

Authors

Hendrik Serruys

EY Belgium People Advisory Services Partner

Creative mind and out-of-the-box thinker. Solution-driven and passionate business partner. Addicted to new technologies. Love to wine and dine.

Dean Davey

EY Belgium Workforce Advisory Lead

I’m just an ordinary guy who’s been lucky enough to travel the world doing some extraordinary things in the ‘People’ space. I thrive on empowering organisations to build high performing HR functions.

5 minute read 21 Jan 2020

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Retention policy is much more than HR.

The war for talent, different generations at the workplace, automation and labor market shifts: many organizations are finding it increasingly difficult to keep their employees on board. A conversation with EY specialists Hendrik Serruys and Dean Raymond Davey about the trends and challenges of today and tomorrow.

Digitization and automation are taking the business world by storm. Just about every company in each sector is currently in the middle of a transformation process or is planning one in the short term. In a few years, jobs and positions will be created that have yet to be invented today. Thus the skills required of employees must also change significantly.

Why should companies also focus on the human side of changes during a transformation process?

Dean Raymond Davey: 'Companies that retain their talented people before and during a digital transformation process, maximize their chances of success. What skills do we need, how can we optimally develop or sharpen these for our business purposes, and how do we keep our people involved in all these changes? These are just a few of the crucial questions that companies need to address to keep people on board.'

In this context, is a strategic retention policy only a task for HR?

Hendrik Serruys: ‘Absolutely not. Companies must look at this much more broadly. A digital transformation has an impact on the entire organization. Which is why you also need to develop and deploy a suitable, tailor-made retention policy across departments. In other words, it needs to be fully embedded in the organization. The HR department facilitates these changes, but it is primarily management that carries them out and translates them to the workplace.'

What can companies do to reduce staff turnover?

Hendrik Serruys: 'First of all, accurately map and analyze what is going wrong, where things can be improved, and what the drivers are for increasing employee engagement. We regularly notice that companies follow their intuition or gut feeling with a retention plan. But you also need objective data in order to study everything in detail: data on corporate culture, the work environment, learning and development, career planning, and so on. A retention plan must be 100% tailored to the specific needs of a company and its employees: this guarantees the sustainability of the retention plan.

What precisely can companies do to strengthen their retention policy by analyzing data?

Dean Raymond Davey: 'One of our clients was dealing with high staff turnover. The company quickly conducted an employee survey to see what could be improved. The first quick conclusion: the pay package needed to be improved. When we came on board and collected data on all aspects of the organization, we discovered that pay was not the reason why many people left. That turned out to be mainly due to the quality of the leadership.'

'When you're able to understand the problem almost scientifically, you can tackle it in a targeted manner. Here too, there is no ready-made solution: each company is different, and needs specific strategies for its retention policy.' 

How great is management's influence on retention exactly?

Dean Raymond Davey: 'Enormous! Ineffective leadership is probably the most important reason why employees feel misunderstood, undervalued or misplaced in a company. If people drop out or submit their resignation as a result, they are not necessarily saying goodbye to the company – but rather to their manager. Managers also play a key role in performance management. And the latter is often also generational: you have to approach things differently with a baby boomer than with a millennial for example. This too is custom work.’

Another retention challenge: millennials sometimes switch employer very quickly. Do you notice that with clients?

Hendrik Serruys: ‘Certainly. Some millennials even leave a company after six or twelve months. Which is why the onboarding process must also be aligned with the retention policy. Retention therefore starts immediately after the employment contract has been signed. If you allow new talent to become familiar with the corporate culture and personal responsibilities in a targeted and optimal way, and if you ensure that he or she feels at home in the team, you increase the involvement of that employee. These are all important elements that reduce staff turnover.'

There are also shifts in the labor market. Some companies are working with an increasing number of freelancers. What challenges does this pose?

Dean Raymond Davey: 'The number of freelancers in media groups, IT and consultancy companies is indeed increasing. That involves a certain risk. The more loosely connected employees are with the company, the greater the chance that talented people suddenly go to work for another company. This risk is enormous, certainly for smaller organizations.  Suppose 40 percent of your workforce consists of freelancers: if they all suddenly leave, the continuity of your business is at risk. Companies therefore need to think about this in advance. Certain sectors are heading more and more towards a gig economy: this too requires an appropriate retention model.'

How do you see the future? What will the retention challenges of tomorrow be?

Hendrik Serruys: 'Technology will evolve faster and faster in the coming years. This makes a transformation process an ongoing process for a company: work that is never completed and is constantly evolving. The same applies to the retention policy that must be equipped to handle and respond to this, and must therefore change along with it. Exciting times for all ahead.'

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Summary

Digitization and automation are taking the business world by storm. Just about every company in each sector is currently in the middle of a transformation process or is planning one in the short term. In a few years, jobs and positions will be created that have yet to be invented today. Thus the skills required of employees must also change significantly.

About this article

Authors

Hendrik Serruys

EY Belgium People Advisory Services Partner

Creative mind and out-of-the-box thinker. Solution-driven and passionate business partner. Addicted to new technologies. Love to wine and dine.

Dean Davey

EY Belgium Workforce Advisory Lead

I’m just an ordinary guy who’s been lucky enough to travel the world doing some extraordinary things in the ‘People’ space. I thrive on empowering organisations to build high performing HR functions.