KEY POINTS:
Staff retention is a problem for many companies and innovative strategies are being devised in the quest to hold workers' interest.
The combination of a strong economy, low unemployment and retiring baby boomers means people have a wide range of choice when picking a job.
Switching careers or trying something new is easier.
In this atmosphere, career development programmes are becoming crucial retention tools to counteract the new Gen Y trend of moving on and up the ladder.
One industry in dire need of such strategies is travel.
The situation has gone beyond the critical stage, says Ainslie Hunt, general manager Australia/New Zealand of travel and hospitality recruitment specialist TMS Asia Pacific.
In the travel industry staff retention is the single greatest threat facing small to medium-sized businesses today, she believes, with 60 per cent of all staff now estimated to move on to a new job within less than three years.
Companies offering career development programmes stand a much better chance of retaining their staff, especially those employers focusing on keeping hold of their Gen Y staffers.
"Companies are now employing people even if they don't have a gap because they know there's a high turnover. Everyone needs to always be on the lookout."
To retain Gen Y staff, employers need to keep them stimulated and motivated and the best way to do that is to give the workers lots of incentives.
"For long-term retention, training and development and career progression is what works," Hunt says. "We encourage our companies to look internally for promotion candidates before looking externally and that would naturally create a career path and stepping-stone for colleagues."
The bottom line of retention problems is money: the constant cost of training new staff, the time it takes to hire and the cost of recruitment.
"Also when you have a hole in the team, the staff are maximised, which can, in turn, create a snowball effect in terms of losing staff as they are stretched to the limit," Hunt says.
When staff leave, travel agencies face such difficulties as not being able to meet their service level agreements. For example, they would be contracted to their clients to meet a certain customer service level, sales target or deadline.
Gen Y is really challenging the old school of business, says Katheren Leitner, director of TrainingPlus, a nationwide company which helps organisations with performance improvement strategies.
"They are demanding that we move from a predominantlyhierarchical dictatorial business model to more of a co-operative model," Leitner says.
It's not intentional, but rather that the schooling system is more co-operative and inclusive and this is naturally instilled in Gen Y. They are comfortable with making their own decisions because, as children, they were asked things, rather than told.
"As far as training is concerned, one of the most critical forms of training that any company can do is cultural diversity training," Leitner says.
This means helping each generation understand the other's perspective.
"Some of the greatest forms of training are communication workshops. Why? Because we need to get the generations in dialogue and communicating," Leitner says.
"Misunderstanding each other won't provide a platform to growing a successful business."
Such training needs a time commitment from management.
"Ideally it would be great to have workers come in and managers tell them what to do and they just do it, but Gen Y need to know why and that is basically the challenge. You have managers in a time-pressured environment and a generation asking why."
This creates friction.
"When they ask why, instead of reacting, let's take a step back and make sure we know the answer," Leitner says.
"They are a reasonable bunch if they get a satisfactory answer. If you can't answer why, wouldn't that indicate there is room for improvement?"
Gen Y workers are not disloyal - they just live in a smorgasbord of options and are doing what their parents told them, that is looking after number one, she says.
Hunt says in terms of training, Gen Y people definitely want hands-on rather than sitting in a classroom.
"They will take whatever is given. They want to jump up that career path so self-development and hands-on technical training are both welcome," she says.
The training needs to be dynamic and stimulating. Leitner says: "Gen Y live in the most stimulated of generations. They have two cellphones and they can answer both at the same time."
One of the best strategies is to combine training with one-on-one coaching, she advises.
Any training has to be carefully planned, otherwise it will fall flat. Rewards and recognition are important to Gen Y workers.
"The key for employers is to have an understanding of individuals' longer-term goals and, having identified those goals, to ensure they continue to work closely with their staff and help them gain the critical skills and experience they need to progress within the company," Hunt says.
The travel industry has traditionally invested training dollars in technical skills and product training.
These areas are important, but organisations need to consider taking their investment into leadership and personal development and training that supports the longer-term career aspirations of employees, Hunt says.
"Often companies are so busy with product and technology that training falls behind that. It doesn't get the immediate attention it requires."
Leitner believes there is an easy answer for retention of Gen Y people. "Involve them, ask them what it is they want and be honest with them."
The other side of retention difficulties is attracting the right people in the first place.
Having a strong brand can aid organisations in recruitment.
For New Zealand travel company House of Travel, brand recognition is a great help, says Celeste Ryall, its retail HR manager.
"When people approach me, they talk of the appeal of working for a market leader, a New Zealand-owned business. People are really attracted by the House of Travel environment. The common words are fun, supportive and encouraging," she says.
"We find we generally do hold on to staff, but our biggest talent challenge is finding enough talent to sustain our growth."
Part of the success is the owner-operator model which House of Travel uses, she believes.
The owner-operators are devoted to their business and work closely with the individuals in their team and their expectations.
"They make it rewarding individually - personally, professionally and financially," Ryall says.
Part of understanding the motivation of the workforce is regular employee surveys.
"We see one of the challenges of Gen Y is they want to be in the big picture; they like a collaborative environment."
House of Travel this year sent every employee on a three-day residential training programme.
"It was really about bringing our people in on the big picture, understanding the strategic challenges and opportunities, how the customer base is changing, what we need to do in the businessto adapt and evolve," Ryallsays.
The chief executive, Chris Paulsen, and several members of the management team were at every session.
"It is really empowering for the consultants to hear the management team and understand the strategy and hear the ideas."
The programme is an ongoing commitment. There have been communication, newsletters, competitions, video-based training, follow-up evenings and an intranet site to share what's been learned.
All this underpins the effort to retain good people.
