How To Retain Talent

The benefits of longer retention of employees are fairly apparent: Less time and money spent recruiting, more continuity for customers, less time training and "ramping up" new employees and fewer mistakes repeated.

But what are the benefits that retain employees?

The CMP Channel Group explores this question for the IT indirect sales channel in the recently completed 2007 Salary Survey. We compare average tenure of employees in the IT partner community to the presence or absence of certain benefits and policies in their companies. In other words, we ask: On average how long do employees work for a company that offers certain benefits or has certain policies in place, and how long on average do they work for companies without the same benefits and policies?

The benefits and policies included in the study are paid sick time, paid vacation time, paid family leave time, commissions tied to deals or sales, bonuses tied to individual performance, bonuses tied to company performance, overtime, health insurance, life insurance, domestic partner coverage, retirement contributions, free or subsidized certifications, college tuition reimbursement, technical training reimbursement, adoption reimbursement, a formal review process, and the use of clear, measurable goals for employees to strive toward.

Only companies that have been around more than 5 years are included in the analysis.

For some of the benefits, we can't compare average tenure because too few cases were reported where the benefit wasn't offered. It's safe to assume that not offering these benefits is likely to be a disadvantage when seeking talent. These benefits are paid sick time, paid vacation time and health insurance for every type of employee studied: sales staff, customer support staff, technical/engineering/consulting staff, and staff or department managers. A large majority of companies, 76 percent, also provide staff/department managers life insurance. Likewise, sales staff can expect commissions tied to deals or sales nearly everywhere, with 88 percent of channel companies offering this type of compensation.

Other benefits that aren't as ubiquitous can sometimes make a significant difference in how long employees stick around.

About 69 percent of companies that hire sales staff offer retirement fund contributions to them. Sales staff stay at those companies about 40 percent longer than at the companies without this benefit.

About the same percentage of companies, 70 percent, offer retirement fund contributions to technical, engineering or consulting staff (all included under the umbrella of "tech staff" for analysis purposes). Those that do retain these employees 31 percent longer than those that don't.

At the 72 percent of companies that contribute to retirement funds of their customer support staff, those staff remain at the company 56 percent longer.

College tuition reimbursement, at least partial, is offered to tech staff at 46 percent of channel companies. This benefit is associated with tech staff who stay 28 percent longer.

Life insurance is offered to tech staff at about 74 percent of channel companies. These employees stay 31 percent longer.

When adoption reimbursement is offered to staff managers, tech/engineering/consulting managers stay 32 percent longer, customer support managers stay 28 percent longer and sales managers stay 19 percent longer. However, only about 10 percent of channel companies offer this benefit to department managers. Another "family friendly" benefit, paid family leave time, is offered to these managers in about 45 percent of companies but is not associated with longer retention.

The main takeaway is that, across all employees, retirement fund contributions are the benefit most associated with longer retention of talent and possibly the biggest differentiator at present.

On October 15, CRN and ChannelWeb.com will release a larger analysis of the 2007 Salary Survey results.