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Create a Retention Strategy

To: The Zenith City Director of Human Resources
From: Bob Behn
Date: October 2000
Re: Thwarting the Turbulence Triggered by the Talent Turnover

You have a great recruitment strategy. Now you need a complementing retention strategy. But in designing any such retention strategy, you should have only modest expectations. Because your recruitment strategy produces such outstanding employees, you cannot hope to keep them forever. Indeed, you shouldn’t even try to keep your young talent forever. Rather, you need a retention strategy that permits you to live with continual — and inevitable — turnover.

Ask your new recruits to commit themselves to work for your Department of Human Resources for three (or maybe four) years. In return, promise to help them — when they decide to leave — to find excellent jobs. If they will make a commitment to do excellent work for you for three-plus years, you will make a commitment to train them and to ensure that they move to an even better position — one with both bigger challenges and a bigger salary.

Your Excellent Recruitment Strategy

Bob Behn's Manager's ChoiceGovernment agencies often have a difficult time hiring competent people. The pay is often below what talented people can earn in the private sector. And the job may lack public prestige. But young people can often get more responsibility quicker in government than they do in business.

Faced with this ubiquitous public-sector problem of hiring talented, you’ve developed an effective recruitment strategy. You’ve built a working relationship with the Human Resources Program at the Zenith City branch of the University of West Dakota. You’ve developed professional friendships with key university administrators, wrangled guest appearances in as many classes as possible, and attempted to identify the most talented students. You’ve hired a lot of interns and made some early, and risky, commitments. But to lower this risk, you have also gotten to know many members of the faculty; now, when you call one for a reference, you get real information, not just some perfunctory adjectives.

Each year, as a result, you have been able to hire some of the best young people graduating from the university. That’s the good news. It’s also the bad news. For the more talented the people whom you hire are, the more attractive these people are to private-sector employers. And because you give your staff a lot of responsibility, they get to develop and demonstrate their managerial competence and leadership skills earlier than do many in their cohort who went to work in business.

You have crafted a creative strategy that gives you a competitive advantage in recruiting talent. But you lack a complementary strategy for ensuring continuity in that talent.

Using Money to Improve Retention

You could try using salary increases to retain people. For at least two reasons, however, this is unlikely to have much of an impact.

First, you won’t get much money for raises. When your young, talented staff move to a new jobs, they don’t get just 5 percent salary increases. They get a jump of 20 percent — or more. You’ll never match that. Maybe you can convince Kerriga Joseph, the city manager, to give you a larger pot of money for annual salary increases — or to occasionally come up with a special package for someone who has another job offer. (But given that you run the Human Resources Department, this may simply look to other department heads like you are playing favorites with your own people.)

Second, your young employees care about more that the money. Sure, the money helps. But most of your young talent don’t have big family obligations. If the money is up to their minimum, they focus on the challenge — and on the opportunity to learn. Even when they graduated from college, you probably offered them less than they could have earned in the private sector. And they knew it. But you offered them more responsibility. And they took it.

Unfortunately, you can’t offer them unlimited responsibility. They can go only so far in your human resources shop. And you can’t offer them unlimited money, either. Thus, they will inevitably leave. Moreover, the more talented they are, the more offers they will get quicker, and thus the earlier they will leave. Every agency in Zenith City has a turnover problem; but because you have managed to recruit an unusually talented staff, you have an unusually large turnover problem.

Adding Two Commitments to Your Recruitment Strategy

So don’t try to keep your people forever. But do try to keep them long enough to reduce the turbulence caused by the continuous turnover.

Ask each person you recruit to make an informal commitment to work for your department for three (or four or five) years. The need for this commitment should be obvious to your young, bright recruits. In their first professional job, it will take them awhile to get up to speed and be productive; and during this time, the department is investing a lot in their formal and informal training. Consequently, it will be several years before the department will have earned back this investment.

Thus, you need to ask each new recruit to commit to working at human resources for a given number of years. For some, three years might be enough. But, for example, for Flora Bryce’s replacement as Zenith City’s health-insurance specialist, you might ask for a five-year commitment. After all, this person will need several years to learn all the details of the fast changing world of health benefits.

In return, make a commitment of your own to each them: “If you live up to your commitment, I’ll help you find an excellent second job with a lot of challenge and responsibility.” Some of these jobs might be in the private sector. Some might be within Zenith City’s government. After all, as the city’s human resources director, you ought to know about pending vacancies across city government. And you ought to know which of your people will fit best with which of these openings.

Moreover, you ought to be good at this outplacement work. You have already demonstrated an ability to build professional contacts outside of city government. And to help your talented staff to find second jobs, you’ll need those kind of contacts.

Using Your Placement Success To Help in Recruitment

If you can add this outplacement service to the benefits you provide your staff, you can use its success to keep your pipeline of young talent full. Once you have placed a few of your staffers in better jobs, you will be able to improve your recruitment pitch: “And after you’ve fulfilled your four-year commitment to the department, I’ll help you get an even more challenging job — just like I did for Jessica Frye and Heather Slocum.”

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