Updated: Nov 28, 2020
In any organization, there are always people who want to leave. As living entities, organizations are constantly evolving (growing or decreasing, improving or deteriorating, succeeding or failing). As with everything else, the only constant in organizations is change.
And internal change is needed to cope with external change. But if we want to succeed, we have to plan the internal change, and voluntary turnover is, in most cases, one of the critical enemies to a ‘planned’ internal change.
While a controlled, smooth, low-scale employee turnover is needed (it helps to bring new skills, new energy, new future, new motivation) for a living entity, it does not always help us this way. Especially when:
We lose the people we don’t want to lose,
We lose the people before we can afford them to leave, and
We lose more people than our organization can afford to keep the requested performance levels.
In these situations, it creates such an internal dysfunction that it can threaten our survival in such a way that employee turnover is a key performance indicator for the organizations, and a nightmare for those who are appointed to be responsible for it, usually the Human Resources (HR) departments.
Like with other performance indicators, someone came with the idea to ask employees why they decided to leave, then they created a Pareto of reasons, so they could ‘develop’ actions to avoid other employees to leave.
This logical approach, overly used as a continuous improvement process methodology in the technical world (PDCA cycle: Plan-Do-Check-Act) is not so evident to work when the human factor is involved.
In technical areas, the data measured and deviations versus a standard are cold facts we can rely to build our improvement action-plan on.
What does it happen with the information we to get from analyzing the reasons behind people leaving our organization?
First, it’s not data, they are opinions.
Second, they are biased.
Third, in most cases, it’s, purposely, misleading.
So, if we cannot rely on what employees say at the ‘exit’ interviews, which are the real reasons for people leaving our organization?
While we cannot be sure about it, we have to count on cold data.
Studies (like Gallup’s 2015 Workforce Panel) show that more than 50% of the employees are actively looking for a new job at any given time.
Also, based on the U.S. Bureau of Labor Statistics, employee turnover has shown a consistent increase over the last decade, from 37% in 2010 to over 44% in 2018, being voluntary leavers 4 times more than those who are laid off or terminated.
Therefore, despite all the actions companies are taking to retain their staff, cold, real data show that the rate of employees voluntarily leaving organizations is increasing, with the consequent impact on labor cost.
If analyzing employees’ responses at the exit interviews and taking actions on them doesn’t work, which other approaches companies can take?
The current approach is reactive, in the sense that the conversation company-employee about why she wants to leave (and what we can do to prevent it) happens when the employee has expressed her decision. And such a decision is usually not taken overnight, but it’s a process where the person evaluates everything around her for a reasonable period and she’s got to the conclusion that another opportunity, outside the organization, would be more valuable for her.
Among other reactive approaches companies take, are
Offering a better position for the person who wants to leave,
Counteroffering with a better benefits package.
Although companies might never know the real reason behind a specific employee decision, they have in their hands many different tools, more proactive approaches, to make the employee (much) more interested in staying. And I’m not referring to money.
Focus on what we can control.
Instead of relying on what people in our organization tell at the ‘exit’ interview to build our action plan to minimize turnover (the reactivemode), what prevents us from focusing on what we can control and try to improve it BEFORE some employees decided to leave?
This way we can transform reactive actions into proactive ones.
I propose grouping these proactive actions the following way:
Hiring the right person
Proper integration (Onboarding)
Retaining the talents
1. Hiring the right person
Are we hiring people based on their fit to our organization or based on their knowledge and skills?
We have heard the quote “Hire for attitude and train for skills” but how much of that are we, in reality, doing?
Employees who do not share our culture, values, and mission will only be motivated by money, which puts all the pressure on the organization to constantly having to entice them with better benefits; otherwise, they will be soon demotivated and will start ‘listening to’ other options.
Action for you: In your hiring process, what’s the weight you give to the candidate’s interests, passion, purpose, and values? Whatever it is, double it.
2. Proper integration (onboarding)
Research (like “SHRM Presentation” by The Wynhurst Group, April 2007) shows that “New employees who went through a structured onboarding program were 58% more likely to be with the organization after three years.”
At the onboarding process companies have a great opportunity to
show gratitude for new employees’ interest,
convey the idea of belonging to a wider group,
illustrate the professionalism at the place,
transmit care for the new employee’s smooth integration.
In short, companies have the opportunity to make a great first impressionfor the new employee, impacting her long term productivity, satisfaction, and her employment time in the company.
And, still, many companies only run a short, mechanical, depersonalized, minimum-effort, low-cost process more focused on covering legal and regulatory topics that in the new employee’s feelings and needs.
Action for you: Which small changes could you make to your onboarding process today that would increase the new employee’s perception of your organization?
For more onboarding ideas you can visit The Deep Feedback Movement.
3. Retaining the talents.
Once we’ve hired that right employee whose values are aligned with our organization’s and whose purpose, mission and goals can be achieved by developing herself in our team, there are other critical factors we have to focus on to ensure the long-term engagement and motivation in our Company.
The 2014 TINYpulse Employee Engagement and Organizational Culture Report, based on a study done at 500+ companies and 200,000 employees, shows the following facts:
64% of all employees do not feel they have a strong work culture,
49% of all employees are not satisfied with their direct supervisor,
63% do not see any chance to grow,
25% don’t have the tools they need to be successful,
Only 21% feel valued at work,
44% give peer-to-peer recognition when they have a tool to do so, and
‘Peers and camaraderie’ is the #1 reason employees go the extra mile.
All these factors can be grouped into two areas:
As personal factors impacting the employee’s performance and motivation to excel on what they do, we can consider the (perceived) chances to grow, or having the tools they need to be successful.
As external motivators based on personal relationships, we can consider the impact of peers and camaraderie, feeling valued at work, being satisfied with their supervisor or being recognized for what they do.
What’s interesting to observe is that almost all of these factors can be improved by increasing the management skills of our leaders.
share the vision and ‘walk the talk’ with them,
are genuinely interested in the needs of their employees, and
create the environment for them to succeed with high levels of empathy and rapport.
The reality is that, at the most, organizations focus on training their employees, mostly focusing on hard skills for them to do the job but, the majority of them, do not explore the huge reservoir of talent they have if only they would keep training the leaders to become experts in leadership, rather than (and not only) experts on their specific area of responsibility.
Successful organizations today already realized this fact and began the shift (see the conclusions of Google’s Project Oxygen). They have started focusing on implementing a coaching culture, where the openness of communication replaces gossip and politics, where honest feedback and personal rapport becomes more common than reprimands and micromanagement, and where personal needs of people take a priority over short-term organizational targets.
All of this can be achieved with implementing a coaching organization, where leaders:
Feel comfortable giving and receiving feedback
Encourage innovation and don’t punish failure
Focus on people management and not in micromanagement
Work on eliminating anything against the harmonious team environment.
The opposite just creates the conditions for the 87% of the work-force that is disengaged (Gallup) to look for other opportunities and leave our organization.
Action for you: How can you increase the level of the management skills of your leadership team to become coaches and mentors for their employees?
Whatever actions we already have in place, we can always take steps to achieve better results. It just depends on us focusing on the few and important points to leverage the talent in our organizations.
By just taking small but consistent steps in the direction of the three actions proposed here, you will see your voluntary turnover decrease and will start attracting those individuals best fitting your organization.
If you feel you would need support to move on this process, you can contact me here for a totally free, no strings attached, personalized 90-minutes coaching session, or check Eduard's Coaching Program for more details.