People in charge of hiring and retention process, mostly human resources employees, are familiar with labor market
that is subject to the laws of supply & demand, and they are aware of the cost of finding good replaces and
hiring them. However, in the situations when these experiences do not find their way into the retention efforts,
these people may benefit from the experiences of marketing people.
As all marketing people know; some customers, who spend more money on company products, purchase the high-margin
products, remain as long-term customers and who need less convincing to remain loyal are more valuable than the
other customers are. Smart marketers know how to differentiate these two customer segments, target the valuable
ones and once they engage with them, they are willing to spend money to keep them loyal. Spending money on these
customers will be profitable in return for the company because the old 80/20 rule, in which 20% of the customers
create the 80% of the profits, apply in many industries.
The same market-oriented approach may not be seen in employee retention problems and even though there is performance
evaluation to identify those “who add the most value for the company”, retention efforts are rarely skewed
toward high performers. Merit pays and promotions are given but salary structures are usually not
differentiated with the aim of improving retention of the employees with higher value and higher productivity
than the others in the same job category.
For example, when UPS was struggling with a high turnover rate of its drivers, who are very crucial for a
delivery company as they already know the idiosyncrasies of the routes and have direct relationship with
customers, they found out that the drivers were leaving the job because of the toilsome tasks of loading
packages. Therefore, they assigned this job to a new group of workers that can be easily replaced, as it is less
costly and time-consuming to hire and train.
Individuals who provide formal and informal leaderships to others, consistently create excellent results, contribute
practical and valuable new ideas, require little or no supervision to accomplish their tasks, facilitate the
work of others, have unique knowledge and skills, may cause the company enormous harm if they defect to
competitors. It is also the same case with the employee segments that are essential to the operation but in
short supply, are most costly to recruit and train, creates the most disruption when they defect, control the
company’s link to customers and act as important information transfer nodes within the company.
Be sure that these people and employee segments receive the lion’s share of retention sources and attention.
Surely, no company has full power in how and to what degree it can assign its retention efforts. Sizeable
compensation differences between employees may create conflict and resentment or labor agreement and regulations
and laws may stand on the way to apply market-based approaches. Nevertheless, there are strategies to find out the
best employees and to keep them longer.