1. What Behavioral Competency do you see being used by the HR professional in the scenario?
2. What action shows this?

Retention of Critical Employees

A microfinance bank was having trouble retaining business development officers (BDOs). Since BDOs were the mainstay and front-line staff of the organization, the problem directly affected the organizations profitability. Issues about engagement surfaced every year in the annual climate survey conducted by HR. Management did not address the issues for two reasons. Addressing most of the issues needed significant financial allocation, an investment that management was reluctant to make. Management also believed that there was sufficient slack in the labor market that replacing the BDOs was fairly easy.

A new HR manager of organizational development was hired. This manager happened to be expert in data measurement and analysis, focusing on the business impact of activities and decisions. So, for the first time, HR committed to digging deeper into the issue and defining the direct and opportunity costs of a high turnover rate.

First, the HR manager calculated the cost of hiring and training replacement BDOs, revenue lost while a position was vacant, and decreases in revenue as new employees acquired competence. The analysis showed that the cost of replacing a BDO was 2.5 times the annual salary for a BDO. Next, the HR manager calculated the amount of investment required to improve the HR practices related to onboarding, compensation, employee relations, and supervisor training. Within a two-year period, the projected financial benefits from the improved practices would exceed the projected costs by five times.

The HR manager presented the business case to management, using data to show the return on investment in employee engagement. The management appreciated the analysis, and the banks president immediately approved the use of non-budgeted funds for investment in HR initiatives.