The Most Overlooked Fact About Employee Turnover Rates Revealed

Graph 2

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.

 

P.S.  Don’t forget to subscribe!  Use the box in the upper right-had corner of this page.

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!

Four Easy Steps to High Performance Teams

Now that football season is underway we will be hearing a lot about high performance teams.  The time, resources, expense, stress, planning, and practice that NFL teams use to build a winning season is frankly amazing.  Millions of dollars are on the line.  Jobs are on the line.  The health of some of the most physically fit athletes in the world is on the line.  Teams go to great effort to build a high performance unit to take them to the “big show”.

Businesses have no less at risk than NFL franchises.  They might not have the same players or the same resources, but they have to build high performance teams.  Fortunately you don’t need the resources of an NFL organization!  Here are four easy steps any company can take to get huge pay-offs from their corporate team.

1) Make recruiting a process that is structure and tracked.

2) Be extremely selective with who you hire.

3) Align training with business priorities and coming trends.

4) Give employees a career instead of a job.

Over the next several weeks I’ll expand on each of these steps.  In the meantime, start examining the way you attract employees and how you can improve that process. That alone might get you to the playoffs!

Three Important Steps for Corporate Recruiting

In the article linked below, the writer discusses investments corporate recruiting should make today.  Investment #2, Invest time in thinking through how you recruit people today is the most significant on his list. The other two are dependent upon the conclusions reached after this time is spent.

Here’s some ideas to consider if a company invests this time:

  • If your interview questions are based on the candidate’s resume, you are missing the real questions.
  • If you are still using a “job description” to attract and then validate candidates, you are making the wrong decisions about people.
  • If your jobs have not been benchmarked, you don’t really know what the expectations should be.
  • If your interviewing team is still asking different questions from each other, you are missing great people.

Rethinking these issues, and coming to the right conclusions,  will guide corporate recruiting to create an effective attraction, selection, and retention strategy.

http://www.ere.net/2010/03/10/why-corporate-recruiting-may-be-doomed/#more-12040

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.

It’s not about where they’ve been; it’s about where they can take you!

The resume looked great!  They’d had all the right titles.  Their responsibilities were in line with your job description.  Education (Masters “preferred”) – CHECK.  Correct number of years of experience – CHECK.  Willing to relocate – CHECK.  The resume was even printed on fine, light beige, linen paper.  Obviously a seasoned professional who had all the qualities you were looking for.  The phone screen went well, they met some of your colleagues, HR did the background check (no problems), and you liked the person.  Amazingly, six months into the job things weren’t going well.  They just didn’t click with your style or the company culture.  Their performance was not measuring up to your expectations.  You tried all the performance improvement tricks you knew.  This was starting to cost you time, money, and reputation.  After all, you made the decision to hire them.

As time wore on you realized they had to go.  Alas, more job requisition paperwork from HR and time to give it another try.

Unfortunately this scenario plays itself out over and over at almost every company.  Millions of hard and soft dollars are lost on these kinds of mis-hires.  And don’t forget the lost productivity of the hiring team, lost revenue opportunities, lost operating efficiencies, lower morale, and decreased creative energy.  These dollars have a direct impact on the bottom line. They also have a huge impact on competitive edge.  Plus, it will get harder and harder to find replacement employees as the pool of qualified professional talent continues to shrink.  Guess what – it doesn’t have to be this way!

Resume hiring and traditional interviewing only tells you where a person has been.  You want to know where they are going to take you.  Here are five simple steps you can implement today.  Following these steps will tell you if the next person will move your company forward;

  • First, profile the key positions that will drive your profits and competitive edge.
  • Second, benchmark the top performers in these key positions.  This tells you exactly what the next hire has to look like.
  • Third, STOP interviewing from the resume and start asking questions developed in the profiling and benchmarking process.  Demand that everyone in the interviewing team use this consistent set of questions.
  • Fourth, have a third party independently assess anyone you are considering for a key position.
  • Fifth, interview for the behaviors the person needs to be successful in the job.

In a hyper-competitive market with a diminishing talent pool, companies can’t afford traditional, job description hiring.  When you implement these five steps you’ll find the right top talent to take your company to the next level.

The Strategic Value of Employee Empowerment (Part 2)

Strategic Employers give more than just lip service to employee empowerment.  They know that the best people are looking for this, particularly workers in Generation X and the Millennials.  Last week I wrote about the first five of ten employee empowerment tips.  Here are the rest….

6) Glory through delegation – don’t just give your employees the “grunt” work, give them an opportunity to shine with important tasks and jobs as well.

7) Demonstrate that problems are caused by faults in the system, not by faults in  people.  Let your employees solve the problems by changing the systems, not their co-workers.

8) Feedback, feedback, feedback – do yourself a favor and tell your people how they are doing and tell them often.

9) Recognize and reward your people when they do something  through their empowerment.

10) Provide direction by asking lots of questions.

The Strategic Value of Employee Empowerment

As the Boomers retire from the workforce, Strategic Employers must rely more and more on the upcoming generations.  Both Generation X and the Millennials value work and
work/life issues very differently than their Boomer managers.  There are also much fewer of them willing to devote the same degree of corporate loyalty as does the Boomer and
the Veteran generation.

One easy, inexpensive, and smart move Strategic Employers can make is to appeal to these generations in a way that motivates them to stay.  Employee Empowerment is valued by
both of these generations, but not in the same way it was used to influence and generally coerce their predecessors.  If you truly want your employees to be empowered, and enjoy the benefits of an empowered workforce, you should begin with these ten principles:

1)    Show that you really do value them.
2)    Don’t keep your Vision a secret, tell them about it.
3)    Let them know your company’s, your group’s, or your team’s objectives.
4)    Give them the information they need to make good decisions.
5)    Show your trust and believe in their ability to do the right things.

Next week I’ll add the other five…