How to retain talent through efficient HR processes

Thirty-three years implementing software in Portuguese factories have taught us something that HR reports rarely say: most voluntary departures do not begin on the day the employee hands in their letter. They begin on the day they realise the company has no process for them — no structured onboarding, no feedback, no training record, no predictable rosters. The salary is the pretext. The process is the cause.

According to Mercer (2023), the average voluntary turnover in Portugal was 10.6% — and 52% of companies admit to difficulty in retaining talent. In industrial companies in the North, that figure is frequently higher in a single shift or department than in the company average. That is where the diagnosis has to begin.

This guide presents a five-dimension method for auditing the HR processes of a Portuguese industrial company: people, processes, systems, data and compliance. At the end of each dimension there is a mini verification checklist. In total, 16 control points that distinguish a company that retains from one that recruits on a loop.

Retaining talent does not begin at the exit interview. It begins on the first day — and with the processes that make that day less chaotic than the previous one.

What to gather before starting the diagnosis

Without these data to hand, any diagnosis is mere impressionism. Collect them before moving on to the five dimensions.

You need the voluntary turnover rate for the last 12 months, broken down by department — not the company's total figure. You need the average onboarding time for a new employee, the record of appraisals carried out versus planned over the past year, and a map of critical skills: which profiles you cannot replace in less than 90 days. Add the absenteeism history by team, with the cause where available, and the list of active legal obligations — the monthly DMR to the AT (tax authority) and to Social Security, GDPR, and the mandatory whistleblowing channel if you have 50 or more employees (Law 93/2021). Finally, and this is the step most companies skip: involve the operational manager of each area, not just HR. Departures always have an operational cause. HR records them; operations produce them.

Dimension 1 — People: who leaves, when and under whose management

A turnover rate of 10% is an average that hides everything. A garment factory in the Vale do Ave with 120 employees may have 2% departures in production and 38% in logistics — and the problem lies with the shift management, not the sector. While the company looks at the consolidated figure, the logistics shift supervisor has already lost their fourth employee in six months and no one has connected the dots.

Calculate turnover by department, by direct manager and by age band. Conduct structured exit interviews — five fixed questions, always, without exception, led by someone other than the direct manager of the departing employee. Identify the signs that precede departure: rising absences, measurable drops in productivity, unanswered training requests. These are indicators that an HR system with predictive capability can flag before the employee makes the decision. Document the real cost of each departure — recruitment, onboarding, estimated loss of productivity in the replacement's first three months. When that figure appears in a management meeting, the conversation changes.

Mini-checklist — Dimension 1:

• ☐ Turnover calculated by department and manager over the last 12 months
• ☐ Exit interviews carried out in at least 80% of voluntary departures
• ☐ Replacement cost estimated per critical profile

Dimension 2 — Processes: onboarding and appraisal as real levers

Poorly structured onboarding is the biggest accelerator of early departure. In a project with a food distribution company with 18 warehouses, we identified that 60% of departures in the first six months occurred among employees whose onboarding had lasted fewer than three working days — no manual, no follow-up, no check-in at the end of the first week. It is not an isolated case. It is the pattern in companies that have grown by accumulation and never formalised the process. The new employee turns up on Monday, someone shows them where the toilet is, and by Friday they still don't know who to ask when they have a question.

Onboarding that works has four mandatory moments. On the first day: introduction to the team, access to systems, delivery of mandatory documentation — contract, internal regulations, GDPR privacy policy. In the first week: support from an assigned buddy and a check-in with HR on the fifth day. In the first month: a meeting with the direct manager to align expectations, first objectives and operational questions. In the third month: a formal integration appraisal, recorded in the HR system. Each stage has a named responsible person. If there is no responsible person, it does not happen.

For performance appraisal, abandon the single annual model. Half-yearly cycles with informal quarterly check-ins produce more useful data and fewer surprises. The employee who receives feedback once a year has no time to correct course — and the company has no time to retain them.

Mini-checklist — Dimension 2:

• ☐ Onboarding documented with defined stages and responsible persons
• ☐ Formal check-in at the end of month 1 and month 3 for all new employees
• ☐ Performance appraisal cycle with a minimum half-yearly frequency
• ☐ All appraisals recorded in the HR system

Dimension 3 — Systems: the HRIS that supports (or hinders) retention

An HR system that does not cross-reference attendance, training, appraisal and pay in a single record forces managers to work with parallel spreadsheets. And parallel spreadsheets mean decisions made with out-of-date data — which, in a factory with rotating shifts and weekly rosters, is a recipe for conflicts that no one can explain because no one has the right data.

What a digital HR system should allow, at a minimum: centralised attendance recording with integration into payroll and the DMR; management of rosters and shifts with visibility for operational managers, not just central HR; a training history per employee, with dates, hours and associated skills; automatic alerts for overdue appraisals, expiring contracts and absences above a defined threshold; and self-service access for the employee — consulting payslips, requesting leave, updating personal data. This last point is more important than it seems: an employee who has to ask HR to consult their own payslip is receiving a message about how the company treats them.

pplPortal covers these dimensions — from the attendance and payroll module (pplCore) to skills management and performance appraisal (pplAdvanced and pplEvolution), with predictive capability for turnover and absenteeism via People Analytics. For industrial companies already operating with the MULTI ERP, the integration between operational data and HR data eliminates the duplication of records that is, in itself, a source of error and frustration for teams.

Mini-checklist — Dimension 3:

• ☐ HR system integrated with payroll and the DMR
• ☐ Operational managers with access to attendance and roster data in real time
• ☐ Self-service active for at least payslips and leave requests

Dimension 4 — Data: measuring what matters before it is too late

The HR KPIs that genuinely prevent departures are not those that appear in annual reports. They are the ones that change week by week and that no one is watching. There is a specific error we see repeated in mid-sized industrial companies: they measure annual turnover, present it at the December management meeting, and are surprised. The sign was in the October absenteeism data — but no one had defined an alert threshold, so no one acted.

Qlik Sense dashboards integrated with HR data allow these indicators to be monitored without exporting to Excel. What is not visible is not managed — and what is not managed generates surprises in September when the factory's best cutter hands in their letter.

Mini-checklist — Dimension 4:

• ☐ HR KPIs defined with alert thresholds per department
• ☐ HR dashboard updated at least monthly
• ☐ Absenteeism data accessible to operational managers, not just central HR

Dimension 5 — Compliance: what cannot fail

Legal compliance in HR is not merely a fine risk. It is a retention factor. Employees who receive incorrect payslips, whose leave is not correctly recorded, or who do not have access to the mandatory whistleblowing channel lose confidence in the company — and that loss of confidence precedes departure. There is a detail the manuals rarely mention: in companies with manual or semi-automated payroll, errors in the DMR accumulate silently over months. When Social Security detects them, the problem already has enough scale to generate fines and, worse, to expose the employee to discrepancies in their contributions. That employee does not forget.

Confirm that payroll generates the DMR correctly and on time — by the 10th of the month following, to the AT and to Social Security. Check that HR data is processed in compliance with GDPR: documented legal basis for processing, defined retention periods, restricted access by profile. If you have 50 or more employees, implement the whistleblowing channel under the terms of Law 93/2021 — and communicate its existence to the whole team; a channel that exists but that no one knows about does not comply with the law. Audit fixed-term contracts: the mandatory conversions to permanent contracts have dates that the system should flag automatically, not dates someone happens to remember to check in March.

Document Management with integrated legal archiving ensures that contracts, training records and HR documentation are accessible, auditable and retained in accordance with the law — without relying on shared network folders that no one knows who created or when anyone last organised them.

Mini-checklist — Dimension 5:

• ☐ DMR generated and submitted on time every month
• ☐ HR data processing documented in accordance with GDPR
• ☐ Whistleblowing channel implemented and communicated (if ≥ 50 employees)
• ☐ Automatic alerts for expiring fixed-term contracts

The most common errors — and what makes them hard to correct

The most frequent error is treating retention as HR's exclusive problem. The direct manager is the main factor in departure or retention — not the HR department, not the salary, not the benefits. When an employee leaves a footwear factory in Felgueiras after four months, the cause rarely lies in the contract. It lies in the way the shift management communicates, distributes work and responds to errors. Including operational managers in every retention initiative is not optional — it is the starting point.

The second error is measuring only total turnover. A rate of 8% may hide 25% in a single shift or department. The average consolidates the problem; the breakdown locates it. Without location, no intervention is possible — only meetings where everyone agrees that "something needs to be done".

The third error, specific to companies that have grown quickly, is confusing onboarding with paperwork. Signing the contract and handing over the badge is not integration. Integration is the process by which an employee understands what is expected of them, who to turn to when they have questions, and how their work fits into the company's result. That process takes weeks, not hours — and it needs to be documented, with responsible persons and verification dates.

The fourth error is the most subtle: investing in HR systems without changing the processes those systems are going to support. A new HRIS with the same informal processes as always produces better-organised data about the same problems. Technology accelerates what already exists — for better or for worse.

Quick diagnosis matrix

A company that corrects the high-priority dimensions first — people, processes and compliance — before investing in more sophisticated systems achieves faster and more lasting results. Technology is the multiplier. The process is the foundation.

Frequently asked questions

What really causes employees to leave in industrial companies?

Most voluntary departures do not result from salary, but from the lack of structured processes. The absence of adequate onboarding, irregular feedback, non-existent training records and unpredictable rosters are the real causes. The salary is merely the pretext the employee invokes in their resignation letter.

How should I calculate my company's turnover rate?

Do not use only the consolidated figure. Break turnover down by department, direct manager and age band. A company with 10% average turnover may have 2% in one area and 38% in another. The problem is always in a specific place, not in the whole company.

What is the ideal length of an onboarding?

An effective onboarding has four moments: first day (introduction and access to systems), first week (assigned buddy and check-in with HR), first month (meeting with manager) and third month (formal appraisal). Fewer than three working days of onboarding results in 60% of departures in the first six months.

How often should I carry out performance appraisals?

Abandon the single annual model. Half-yearly cycles with informal quarterly check-ins produce more useful data and avoid surprises. An employee appraised once a year has no time to correct behaviours — and the company cannot retain them.

What are the essential data for diagnosing retention problems?

Collect the turnover rate by department (last 12 months), average onboarding time, the record of appraisals carried out versus planned, a map of critical skills, absenteeism history by team and active legal obligations. Involve operational managers, not just HR — departures always have an operational cause.

How should I conduct exit interviews?

Use five fixed questions, always the same, without exception. Whoever leads them should not be the direct manager of the departing employee. Document the answers in the HR system. Conduct interviews in at least 80% of voluntary departures to identify real patterns of dissatisfaction.

What functions should a digital HR system have in order to retain talent?

It should integrate attendance, training, appraisal and pay in a centralised record. Systems fragmented across parallel spreadsheets result in decisions made with out-of-date data. An efficient HRIS gives managers access to up-to-date and consistent information for making retention decisions.

Sources

• Law no. 93/2021, of 20 December — Legal regime for the whistleblowing channel for entities with 50 or more employees
• Regulation (EU) 2016/679 (GDPR) — Personal data protection, privacy policy obligations in an employment context
• National Statistics Institute (INE) — Portuguese turnover and labour market statistics
• Labour Code (Law no. 7/2009, of 12 February) — Rights and obligations regarding integration, appraisal and termination of employment contract