It is the last week of March, and spring is officially here (although it’s not warm enough for me). Watching the NCAA Men’s Basketball tournament, I really appreciate the effort and challenges the coaches have every year. Because the athletes have only a limited number of eligible years to play, and that can be reduced if a player gets hurt or is eligible for the NBA, coaches are constantly dealing with player turnover. Coaches are always recruiting talent, developing talent, and building a team. While that is unavoidable in the college sports profession, it is a profit killer for businesses. Today I am going to talk about the top three reasons employees leave, and how you can defend yourself against it.
Three Reasons Employees Leave Their Jobs
Last week I came across this fascinating LinkedIn Blog about the top three industries with the highest turnover (is your industry on the list?). I was glad to see that they took the next step and identified WHY people leave. When you know why, you can put actions in place to prevent unnecessary turnover.
Turnover is costly, in fact according to Josh Bersin, Deloitte, the costs can be up to two times the annual salary! With this in mind, it makes sense to have a system in place that minimizes turnover. Competitive pay, competitive benefits, or even an amazing reward system might not be enough. Here are some things you should include in an employee retention strategy to be successful.
Focusing on employee development is ALWAYS a good idea. After you’ve hired someone, the time and money you invest in developing them will only benefit your company. If you want to have the best employees, that give you a competitive edge, it is much better to develop talent from within.
While I am a firm believer that the responsibility for career development ultimately belongs to the employee, the leader or manager must be a guide and a mentor in the process. Most employees are looking to grow and develop. They want to know that their work is meaningful and that there is a career path for them. And if they are happy with the status quo, you might want to consider why they are on the team to begin with.
Managers can and should have regular career development discussion with their employees. I recommend monthly. These meetings should be structured, and result in definite actions. When the manager and the employee co-create a career development plan, and meet regularly to evaluate progress of the plan, employee productivity, then morale increases.
By investing the time for career discussion with our employees, they will know that they are making progress towards the next step. And, they will be less likely to look outside the company for their next promotion.
People don’t quit their job, they quit their boss. At least that is how the saying goes. An employee’s direct manager has the biggest impact on the employee’s experience at your company. The direct supervisor is who has the most contact with the employees. They are often the face of the company, in terms of communicating and implementing policy. The direct supervisor is often responsible for merit increases and promotion opportunities.
A bad manager can kill morale, motivation and productivity. Eventually the pain becomes too great and people leave.
Some of the common mistake’s managers make (especially new managers) are:
- Relying on authority
- Lack of leadership
Managers and supervisors need to be trained and understand that their job is to coach and develop talent. Leaders inspire others to take action. They inspire others to give that extra discretionary effort that sharpens your competitive edge.
I have been focusing on culture all month. Culture is simply the paradigm of any particular group. It is basically a combination of morale, company habits, and is reflected in how people treat each other, productivity, and profits. It is what makes each company unique, and why some people fit in at one company better than another company. Because culture encompasses so many different aspects, and penetrates the very fabric of your company, it is often the hardest to change.
So, there are two reasons culture can drive turnover. The first is sometime people just don’t fit. In the book The Great Game of Business, the author created a certain culture within his company that focused on certain metrics and team buy in. The author admitted that some people weren’t on board, so they left. This is also evident when companies merge or one company buys another company. There is always shift in culture and some people will just leave because of it.
The second reason culture can drive turnover is when the culture is toxic. If the culture cultivates distrust, favoritism, or discriminates against others (intentional or unintentional), these issues need to be fixed immediately and change must come from the top down.
It goes without saying, but a company needs to have an inclusive culture. Where people are free to create, risk, suggest, try, fail and succeed. Your business isn’t an open lab for everyone to work when and how they want. Set guidelines and boundaries, enforce them, but encourage people to bring new ideas to the table. Setting the right culture from the top down, will have a noticeable impact on your companies’ turnover rate.
This Week’s Challenge
Do an evaluation at your company. Do you have a system (not policy) in place to minimize the impact of employee turnover? Does it focus on career development, management and culture? If your system is lacking or needs help in any of these areas, get to work on making necessary changes to help minimize the negative impacts of turnover in your company.
If you would like to discuss more ways to help your business grow or if you feel you have a specific problem that needs to be addressed, please reach out to me.