The Most Overlooked Fact About Employee Turnover Rates Revealed

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What is employee turnover?  Conventional thought would tell you that the employee turnover ratio is hires compared to terminations over a period of time.  Certainly there are complex methods that tell you how to calculate turnover.  Companies spend a lot of money to find and understand staff retention rates.  A high attrition rate is expensive.  Staff retention has to be a priority for every organization.

I would suggest that the traditional methods that teach you how to calculate turnover are wrong!  Yes, they can tell you a mathematical ratio and, yes, that number is true.  But corporate leaders could be asking the wrong questions about their true retention rate.  Instead of asking “what are our employee turnover rates?” a better question is “What is employee retention?”  An employee doesn’t have to leave your company to stop working.  Recent surveys state that more than 50% of employees today have mentally or emotionally left their jobs.  To really understand your attrition rate you must factor this into how you calculate turnover.  A disengaged employee could cost a company more than a vacant seat.  To truly understand staff retention, employee engagement must be part of the equation.   Otherwise companies are fooling themselves into believing their employee turnover rates are simply a mathematical ratio.

The most overlooked fact about employee turnover is this; employee disengagement has to be part of employee turnover rates.  Find out who is in the wrong job (see my other posts about job analysis).  Add that number to your actual terminations.  Then you’ll truly understand your employee turnover ratio.

 

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The Number One Way to Fail at Motivating Employees

Are you still Fishing for employee motivation?   This was a popular employee motivation strategy several years ago.  There are lots of books on Amazon.com that will teach you about how to motivate employees.  Every business wants good employee relations and a happy, productive workforce.  Strong and positive employee morale is necessary for optimum productivity.  I can’t think of any client who has told me they didn’t want high employee satisfactory.  All companies work hard to motivate employees.

Corporate leaders and business owners have a lot of reasons to know how to motivate employees.  High levels of employee engagement make their jobs easier.  They want less stress in their employee relations.  They have profits to increase.   They want to sharpen their competitive edge.  They want to keep costs low and productivity high.  They want to generate more revenue.  They want, they want, they want…   Are you reading this?  They want to motivate employees for all their corporate reasons and this is why most companies fail in how to motivate employees.

Employee motivation, employee satisfaction, employee engagement, and employee relations will never improve if it is all about what the company wants.  No one is going to work to make the company better or to reach company goals.   Organizations will fail if they believe a slick, new “program” is the way to motivate employees.  Employees will only be motivated when they know what’s in it for them.   They will increase productivity only when their needs are met.   Incentives to motivate employees must be tied to what they value and desire.  Strategic employers know this.  They work hard to understand what makes their employees tick.  Only when employee values are linked to motivating incentives will companies succeed.

Employee Retention Hot Topic for Business Leaders

Entrepreneurs and business leaders report employee retention is still on of their top 3 challenges.

A 2011 AFLAC Workforce Report found that 18 percent of business owners see the benefits package as a direct influence on an employee’s decision to leave.  The report lists voluntary benefits as a way to reduce costs and still offer quality benefits.

What is important to note, however, is that even in a recession and high unemployment, good people are willing to leave their jobs.  This makes solid employee retention strategies an essential part of every business opeation.  As the report states “it takes time and money to recruit, interview, train and hire a new employee.”  Buisnesses who don’t drive employee retention strategies from the top down are going to lose their competitive edge.

If your business doesn’t have a written and implemented plan to minimize employee turnover, today is the best day to start!

Do the Opposite – Employees Will Love You

When I finished my active duty service with the Navy I took a job as a sales representative.  The company sent me to a training session with a world renowned sales trainer.  During one session he asked us to list the first word that came to mind when we heard the term “salesperson”.  We all listed words like “pushy”, “obnoxious”, and “slick”.  He told us that if those are the words 95% of the pubic used to describe salespeople we should become the exact opposite and we’d be successful.  For me that strategy worked very well.

Employers can apply this lesson after they read the article linked below.  Not only does the article list the most hated jobs, it also provides great insight as to what employees hate most about a job.  It’s not what you might think!

Today it is the company with the best talent that beats the competition and increases profits.  Employers don’t want their top talent hating their jobs.  Read the article then be sure your company is doing the opposite!

10 Most Hated Jobs

Step 4 or 4: High Performance Teams

Give employees a career instead of a job

“That’s just not fair!”

Whether it is true or not, this is not something you want employees to say.  Often is beyond a company’s power to control how employees feel.  However, company’s can avoid creating situations that might cause an employee to think or say this.  Companies DO have a great deal of control in which they hire and promote.

In my executive search business we often hear from executives who feel this way.  Either they have been passed over for a promotion or they have seen others passed over multiple times.  Sometimes their company never considered an insider for an open position. Whatever the reason, these people feel like a commodity instead of a valued contributor.  If this kind of perception starts to permeate the workforce the company is doomed – especially now that top talent is harder to find.

There are many reasons why a company would go outside to hire top talent; they don’t have a qualified person internally, they want fresh perspectives, they want competitor intelligence, etc…  Hiring outside is expensive, time intensive, and dangerous (see steps 1 & 2)! Often it can be avoided if companies have a career development culture instead of an open seat culture.

Hiring from your current employees only works if you diligently practice Step 3.  It also means a huge ROI on your labor expense.  When employees believe they have the opportunity to grow and advance they don’t spend time looking elsewhere.  When they enjoy a company development program they have greater confidence to take on more responsibility.  Employees will take their performance more seriously and pursue self-development agendas.  Giving an employee a career is a long-term investment strategy, one that every company must follow.

This is the final installment of the four steps to building a high performance team.  Putting these steps into practice will have tremendous impact on company profitability and competitive edge.  Don’t wait until your competition has all the top talent, beat them to the best people now!

Can you really Motivate employees?

“Employee Engagement” gets a lot of lip service, but very little action. This is the key to motivating and retaining a productive workforce.   More simply stated employees have a WIIFM attitude.  People are not going to work for the company’s reasons; they are going to work for their own reasons.  Unless company leaders can tap into those reasons they risk spreading the disease of “warm-chair attrition”.  This is the state of having an employed body in a chair, but the mind has long since quit the job.   It is the responsibility of corporate leaders to eradicate this disease from their organization.

This is easier said than done.  It is virtually impossible if managers and leaders don’t know who works for them.  Today four generations are working together, each valuing work very differently from the other.  Few companies have trained their managers on how to relate to a multi-generational workforce.  In the absence of any guidance, managers will motivate employees from their own perspective and needs, not from the employee’s.   We all laugh at the “Beatings will continue until morale improves” signs, but many employees perceive corporate retention strategies and performance management programs as just that!

The best solution is for companies to teach their managers about who works for them.  Teach them how each generation and individual employee values their work life.  When armed with this knowledge, companies can create an effective and profitable talent management strategy.  This would include everything from recruitment, HR management, to the on boarding process and employee retention.  If done correctly then employee morale won’t be a problem.  Once word gets around people will be clamoring to work for the company.

Creating Powerful Problem Solving Teams

One of the most effective and creative ways is  to create cross-generational teams .  There are two benefits to using this approach.  First, team members develop a greater appreciation for the power and perspective of the other generations.  Second, each generation will approach the problem from different aspects.  Their unique experiences will suggest possible solutions that might not be considered outside of a single generational perspective.

Managers will need to create these teams carefully.  There are certain ideal generational pairings that foster tremendous synergy.  Other parings will take more thought and guidance to be productive.

Motivating Employees in a Down Economy

There are several principles that managers can employ to keep employees motivated during a downturn.

First, communicate twice as much as you normally would.  There is a lot of anxiety, rumor, gossip, and stress among employees.  They need to be kept informed about company performance, progress toward goals, and about their own performance.  Keep the dialog open, informal, and frequent.

Second, make sure each employee knows how their contribution impacts the bottom line.  Help them understand that what they do matters.  Show them that doing better benefits the entire organization and  makes the entire company successful.

Third, be sure managers understand the ‘WIIFM’ principle.  Employees will only be motivated for their reasons, not management’s.  Corporate leaders must know what their employees work for, what inspires them, and why they come back everyday.  It will be different for each of the four generations working in your company, but it must appeal to them individually.

If you start with just an informal, conversational survey of your employee’s motivations, you’ll be off to a good start.

Read The Best Answer…

An appreciative “Thank you” to Vincent Vanderbent for recognizing my answer as being  the best in response to his LinkedIn question

“Employee retention: why do you keep inefficient managers and staff?”

It is a great question and the answer has eluded countless organizations.  You can read the full question and my answer at the following link:

http://www.linkedin.com/answers/management/labor-relations/MGM_LBR/625840-23470066