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November 2006

Employee retention key in first 2 years

Twice as many employees with less than two years of service voluntarily leave an organization as do those with more than two years of tenure, according to a study of worker attrition rates by Sirota Survey Intelligence.

Employees with less than two years of service voluntarily leave at an average rate of about 20 percent per year, while those with more than two years’ tenure quit at an average rate of about 10 percent per year, according to the study of nearly 47,000 employees. Moreover, the data show that — of all those who voluntarily leave within any given year — almost 60 percent have less than two years tenure.

“To improve overall employee retention rates, companies should pay closer attention to retaining workers with less than two years’ experience in their jobs,” said Douglas Klein, president of Sirota Survey Intelligence.

“During the first two years on the job, employees are confirming that their actual jobs meet their expectations, as well as those that their employers led them to believe during the recruitment process,” said David Sirota, chairman emeritus of Sirota Survey Intelligence and co-author of The Enthusiastic Employee: How Companies Profit By Giving Workers What They Want (Wharton School Publishing).

Companies can improve the retention of newer employees by 10 to 13 percent by adopting more effective management policies and practices, according to analyses based on the study. Key actions should include:

  • Making the work more challenging, if possible;
  • Being clear about potential career paths and providing greater opportunities for development;
  • Managers being more consistent in what they say and do;
  • Creating an atmosphere where employees feel valued — recognizing them for good performance, and listening to their ideas and acting upon them;
  • Creating a secure environment where employees do not continually feel as if they are on a “slippery slope”; and
  • Encouraging high standards of personal and professional integrity, such as clearly laying out what’s expected in terms of ethics, and establishing accountabilities and consequences for exemplary and sub-standard behaviors.

Source: Sirota Survey Intelligence, www.sirota.com

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