I quit! Your employees are leaving. Do you know why?
COVID-19 has rapidly transformed the organizational workplace from digitizing the relationship between firm and customer to digitizing the relationship between employer and employee. The implications are far reaching, but perhaps none more so than the impact on employee hiring and retention. The pandemic has employees and job candidates wanting more from their employers. More flexibility. More time with family. More money. People who don’t believe they are getting their needs met are leaving in large numbers. In a previous blog, we referred to this as “The Great Resignation.”
I recently read a Forbes article about the ‘Working Dead. It struck me that with all the focus on the people who quit, we are neglecting to consider the people who remain. Even with the millions who have left their jobs, many more are sitting in positions where they feel overworked, underappreciated, or burned out.
People have a choice: Stay where they are or join their colleagues in today’s employee-centered job search. Many times, the easier, or more appealing of the two is to move on. Unfortunately, this creates a never-ending cycle for employers of “filling the bucket” with new employees as the existing ones drain out through the hole in the bottom. Those holes are:
- Expensive since hiring and retraining new employees is much more costly than retaining your existing ones.
- Detrimental to the culture and overall satisfaction of the existing team. When leaders or other colleagues leave, it changes the team’s dynamic and creates unrest and a disengaged staff that puts the entire workforce at risk.
- Creates incremental gaps in your company’s knowledge base and customer relationships that will impact your bottom line.
What is the solution? Seal the hole in the bucket.
Josh Bersin of Deloitte states the total cost of employee turnover can range from tens of thousands of dollars to 1.5-2X their annual salary. Those numbers increase dramatically for higher-level employees, with senior management costing as much as 400% of their yearly salary. With those calculations, retention is a much less costly endeavor than rehiring.
The real cause of employee attrition
The typical answer people will give is “the money.” But is it really?
When people are unhappy at work, they tend to focus on compensation as the reason behind their unhappiness. However, various statistics show that if people make a livable wage and are passionate about their work, they are less likely to focus on money. If that’s true, then what is the real reason people are leaving?
The truth is…you don’t know.
You can make a lot of assumptions, but to get an accurate picture requires benchmarking.
Companies use benchmarking to identify and establish essential performance standards or benchmarks and measure their performance against those standards over time. Customer satisfaction surveys are the most familiar benchmark. Applying the same principle to employee retention, you can determine employee satisfaction and the correlation between inclusiveness, engagement, trust, and passion in creating employee satisfaction. All are key components used in the Employee Passion Survey.
The Employee Passion Survey measures how a company meets the five primary employee needs required for passionate, engaged employees and the level of trust employees have towards your organization. With this data, as well as a roadmap for meeting these needs (beyond money). your leaders can begin to “plug the holes” and retain team members.
You do need to fill the open positions, but that bucket will only get so full without paying attention to the issues causing attrition. If you don’t take action, those same people you just hired become the next generation of disengaged employees that put your entire workforce at risk. Fill the holes, and you have a competitive advantage.
What are the key takeaways?
Buying lunch may be a nice gesture and have a short-term positive impact. But, it will not make up for a culture that lacks autonomy, respect, and recognition. If money and free lunches are not solving the underlying issues, then what will?
- Your leaders must build trust and create a culture that meets the needs of your existing staff while at the same time recruiting new people. By building trust and a positive culture, the “sales pitch” you give your recruits when they join you will match their employee experience.
- Recognize when you are on a treadmill and going nowhere. Unless you benchmark the issues, you won’t know the solution to employee retention, employee engagement, and building trust in your leaders. Companies that can do all three of these things have a competitive advantage over those stuck on the treadmill.
Where to start
You’ve heard the phrase, “throwing good money after bad.” There are very few problems I’ve seen where simply throwing more money at it will solve the issue. Strategically, is important to consider how spending time and money now to assess and develop a road map to solve the retention problem is less expensive than hiring new people or just putting money into higher wages and bonuses.
For less than the cost to replace one employee, you could likely put an entire retention plan in place.
Like any management pursuit worth doing, benchmarking takes effort. But outside help is available. If done correctly, benchmarking holds the key to future success for you and your organization. Contact our team to discuss how we can help you develop a roadmap to build a culture of trust, inclusion, and passion so you not only fill the bucket but plug the holes in it.