Comparing Turnover Percents

In his terrific book, “Good to Great," Jim Collins warns against comparing one company’s metrics against another’s because it is easy to justify one’s own mediocre performance if it is the same or better than an average competitor. This great advice really hits home when comparing turnover numbers for several reasons. One is that companies tend to report turnover in different ways, but more importantly it can be soothing to know that your turnover is the same or a little better than a competitor’s when the raw data tells you that your are losing half or more of your staff each year. That’s bad news no matter how much worse your competitors are. These benchmark comparisons also lead to the obvious excuses that stop improvement actions like “We’re doing better than ___ so we must be doing OK”. The implication is that there are no solutions available…and there are.

Employee Retention Tip of the Month

Retention Tip #17: Hire Older Workers

The U.S. Bureau of Labor Statistics has determined that the older a worker is when starting a job, the longer the employee will stay. So whereas this might bring grey hairs to mind, it also means that 30-somethings stay longer than 20-somethings. Consider age when hiring workers, especially if you work in the service industry and hire call center agents, waiters or waitresses, hosts or receptionists. And, ask yourself this. Can you increase your employee retention by hiring workers who know what they like to do, have bills to pay and are more stable in their lives?

The Power of Stay Interviews

We believe Stay Interviews are far more important than exit interviews. With our clients, Stay Interviews are conducted by firstline supervisors rather than HR so these supervisors hear in-person and with no filters why each individual team member stays. Once these supervisors are trained to ask pre-formed questions and then probe, they learn actionable things they can do that are important to employees…and therefore help them to stay.

The training sessions include role plays where we ask supervisors to “play themselves” rather than play pre-assigned roles. In a recent session, a food service supervisor said she was interested in learning more about computers and about international foods. The entire group then brainstormed ways that supervisor’s manager could fulfill this wish and came up with the following ideas: teach her to save international food websites in her “favorites”; send her international food articles online; suggest international dishes for company functions; buy her an international foods magazine subscription; give her an international foods book on her next service anniversary.

This example makes the power of Stay Interviews clear, both for retention and engagement. Solving many employees’ needs is easy if we ask and learn what they are.

On Your Mark…Get Ready…Change Jobs!

History tells us that employee turnover goes up when recessions turn to recoveries, and early data says that trend will continue in 2010. Finnegan Mackenzie, our sister company, conducted a study with ExecuNet on executive retention and found a clear and alarming pattern…that executives who are highly engaged are also eager to leave. The study found that while more than 90% of executives are engaged in their jobs, more than 70% would take a recruiter’s call. In fact, more than half are already looking and nearly 90% said they would accept or strongly consider an opportunity that was better for them in the next 30 days.

“Myopia” best describes these executives’ perceptions of their teams. The numbers for the next level down are similar to those reported above, yet CEOs believe the percent below them who are looking now is far below the actual count.

This data challenges the long-held belief that engaged employees will stay. Consider how your executives view their ability to retain key players as more jobs become available? Might you need to provide retention solutions now before you incur a 6- or 7-figure loss to get top management’s attention?

Why “Lucky to Have a Job” Didn’t Work

The recession leaves in its dust 3 data points that underscore how high-performing employees can always find jobs:

• Per the U.S. Bureau of Labor Statistics (BLS), the number of workers who voluntarily quit their jobs in 2008 fell just 11% compared to the number who voluntarily quit in 2007; this means that your chance of losing a good worker in the depths of the recession were a full 89% as strong as they were when the economy was at full strength
• A University of Wisconsin study confirmed that voluntary quits went up after layoffs, citing that a layoff of just 1% of the workforce caused voluntary turnover to increase a full 31%
• MSNBC reported that job applicants nearly tripled in 2008, ensuring that selection criteria was high and only the best applicants were hired

This data confirms that if any employees felt lucky to have a job, it was probably those who performed less than stellar and held on while the job market shrunk. Think back to your turnover during 2008 and 2009…Did you lose good performers or average ones?

Caught on the HR Side of Retention

Here’s a rambling from just this afternoon. An HR director told me she had done all she could to reduce turnover among licensed social workers but continued to lose 25% of them each year. She estimated their cost per exit to be $10,000, and losing 50 each year culminated in an annual expense of about half a million dollars. My first thought was “Does the CEO of your company know this? Does your CEO, or CFO, know that reducing turnover by 20% is worth $100,000 to your company each year? Not just once, but each year?”

And if the economy hadn’t helped cut turnover, wasn’t it likely that quits would rise even higher in the new year?

Her real problem became clear. She had interviewed employees on why they stay or why they left, she had asked managers to attend training programs, she had re-thought onboarding and other HR programs…and she was tagged as the sole provider of solutions.

Our discussion led to the Rethinking Retention Model(sm) and ultimately the Certified Employee Retention Professional program (CERP). Candidates in the CERP program are required to implement a shared model whereby the responsibilities of HR and executives are clear. Whereas HR provides new, retention-driven processes for hiring, training, onboarding, and other traditional roles, executives must place a dollar cost on turnover and drive retention goals and consequences from top to bottom.

So a new type of retention discussion is happening in that organization now, and it’s likely the HR director will participate in the CERP program in order to share retention responsibility with her management team rather than struggle with retention on her own.

A Quote to Remember

Years ago I was an HR director of a large company, and our CEO was a gifted thinker and master of rhetoric. One day he said the following:
“HR’s role is to never make a decision for a manager and never let a manager make a bad decision”

I wrote this down as I sat at the foot of the ultimate tribal chief. But sometime later I privately questioned his logic. We all know that our role is to manage by influence versus authority, so how then can we be certain to change a manager’s direction if he is committed to it? And what if his manager is equally committed? And what if we’re completely out of the loop and don’t even know the circumstance?

The solution became clear, especially as it related to retention. By installing retention goals and accountabilities, “bad decisions” became apparent and were ultimately addressed. So sometimes the next best thing to having authority is to ensure that those with authority have the right metrics and apply the right accountabilities, so we can achieve the outcomes we need, and our company needs, without being squeezed in the HR middle.