How're You Gonna Keep 'Em Down On the Firm?

Now Rabinowitz and Durham promise their employees that when they're on the beach, they don't have to worry about being washed away. They can take that time to use the company's training materials to catch up on new software, learn about Web design, or even follow a company-paid self-study course for Microsoft or Novell network certification. About six months before they began focusing on retention, Durham and Rabinowitz had decided to beef up training. "We had considered it more a recruiting strategy," says Rabinowitz. "But we hadn't really thought about training in retention terms."

Tabb, for one, was at first unsure of what he thought about the management's new training policy. "I figured it meant they'd make sure I was working all the time," he says. "I thought there was no way they were going to pay me when I was between assignments. But they have. That was the true test for me, and that's what has kept me here."

Based on her discussions with IHS employees, Gioia suggested that in addition to training, IHS should offer its staff more long-range career prospects. "Employees felt that we didn't know and respect them as technical people," says Rabinowitz, who understood that few people wanted to sit at a help desk indefinitely. So last February he started to chart out career options at IHS, including a managerial route and a technical path, that would enable employees to become full-fledged consultants at Leveraged Technology.

Rabinowitz also began visiting each employee for annual check-ins, which gave him the chance to help employees set short- and long-term goals. At the sessions, Rabinowitz draws a T on a piece of paper, listing on one side what IHS will do to help employees reach their goals. On the other side he lists what IHS expects in return, such as professionalism and punctuality. "I also stress that if we are fulfilling our end of the promise, we expect them to remain employees of IHS," says Rabinowitz, who asks employees to sign the paper. It's hardly legally binding, he admits, but it does help firm up expectations.

STEP #5: Institutionalize Retention as a Management Function
To ensure that the retention tactics become a part of the company's regular processes, Rabinowitz and Durham have kept the retention team's weekly meetings as a permanent fixture. The team will also oversee the next phase of changes, which include a formal mentor program.

Also in the works is a process to formalize the training and career-path components in what Rabinowitz calls a "career orchestration." That will involve a two-year timeline for each employee, with benchmarks for when various phases will kick in. While the key components of the retention strategy are up and running in the company's eastern region, Rabinowitz and Durham have yet to roll the program out to all of their six national offices; Atlanta and Chicago, for instance, don't have it yet. "The problem is the training," says Rabinowitz, who hopes the program will be fully implemented by mid-1998. "We need to have a facility for people in different regions to go to for that."

Treating retention as they would any management discipline also means running numbers on it--constantly. But math mavens though they are, Rabinowitz and Durham claim that they haven't yet been able to calculate the program's return on investment. "We've been having problems with the calculations because of some lost data," claims Rabinowitz. "So we don't know exactly how well it's worked except from a gut feeling and some very basic stats that make it seem it's working very well."

Preliminary results show that annual resignations, which had been projected at 300% for fiscal year 1997 (which ended August 31), landed at only 25%--where they remained during the first quarter of fiscal 1998. And the percentage of new hires who fled within three months dropped from 30% to 12.5%. The number of people who are billing is currently up to 165 and rising, says Rabinowitz, possibly because customer satisfaction, as measured in surveys, has inched up to 3.3 (out of a possible 5) from its earlier average of 2.75. And Durham is encouraged that the company's growth seems to be resuming, with projections of $15 million for fiscal year 1988.

But there is no way to quantify some of the changes Rabinowitz and Durham are seeing. "More people have been asking for business cards," Rabinowitz says. "They want to show people that they work for IHS." The number of employee referrals is also up. Although employees do still leave, they at least give two weeks' notice. Last July the company picnic--which Rabinowitz had considered canceling, for lack of attendance--drew employees at comparatively Lollapalooza-like proportions: 175 showed up. "And I don't get people calling me and just bitching anymore," says Rabinowitz. "If they have a problem, usually Tammy will hear about it in her weekly calls. So in many cases, we preempt any need for them to leave."

Clearly, Durham and Rabinowitz still have employees to win over. As late as October 1997--eight months after the retention effort had begun--employee Tabb was sure that the company provided a 401(k) plan (which it doesn't) rather than an ESOP. "Either way, it doesn't mean much to me," says Tabb. "I'm not sure I'll be here long enough to benefit from either." Colleague Jeff Menzies, a help-desk supervisor for the past two years, observes that "not much has changed in my relationship with the company." By contrast, analyst Joanne Lutz says she can imagine leaving only if "all the communications and niceties stopped as the company grows." That, of course, remains the challenge for IHS: Rabinowitz and Durham are hoping that the company's retention efforts will spur growth. But as the business expands, maintaining that focus will likely become increasingly difficult.

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