Outsourced Exit Interviews, Stay Surveys, Leadership Assessments and so much more.
Employee turnover is something that many businesses wish to minimize as it helps to keep a cohesive, experienced team with the company. A constantly revolving door means many hours are dedicated away from typical necessary tasks, requiring time to interview candidates, retrain new employees, and help pick up extra work as new roles are being learned. What many do not seem to realize, however, is how much money employee turnover is actually costing the company.
Various studies and observations have attempted to quantify the true cost of employee turnover. One case study from Maia Josebachvili, VP of People at Greenhouse, found that keeping one salesperson for three years instead of two, plus ensuring better management and onboarding, produced “a difference of $1.3 million in net value to the company over a three year period.” Josh Bersin of Deloitte estimates that the cost of losing an employee ranges from tens of thousands of dollars to roughly 1.5 – 2.0x that employee’s annual salary. In a more comprehensive study from the Center for American Progress consisting of 11 different research papers over 15 years, “the average economic cost to a company of turning over a highly-skilled job is 213% of the cost of one year’s compensation for that role.”
It is no question that losing an employee can be quite costly, and your business needs to plan accordingly. As you prepare your 2019 budget, be sure to account for potential employee turnover. The costs will be unique to each company depending on the type of business, the specific positions in question, as well as how much turnover you regularly experience. Thankfully, there is an equation you can use to help calculate this cost, but you will need to know the following metrics:
You will also need to know the number of employees with your company and your annual turnover percentage. Once you have each, plug them into the following equation:
(Hiring + Onboarding + Development + Unfilled Time)
x (Number of employees x Annual Turnover Percentage)
————————————————————————————-
= Annual Cost of Turnover
Understanding your usual employee turnover rates is essential in helping you solve issues within the company that may be causing great talent to leave. You won’t be able to solve turnover 100% as there will inevitably be those who leave for personal reasons, but every effort should be made to resolve issues that are under your control.
The ultimate goal is to prevent as many great people from leaving as possible, which is achievable by utilizing stay interviews. You will gain a better understanding of how the company and leadership are functioning in real-time with honest and unbiased results. Again, keeping the team intact for as long as possible brings the necessary experience to your company while saving valuable time and money.
It is also helpful to utilize exit interviews or surveys, such as our ExitRight® Employee Exit Interviews, in order to better understand the reasoning behind turnover, allowing you to get to the root of the issue. The information received from these interviews enables employers to actively create programs that help prevent future turnover. Of course, these surveys are great as preventative measures, facilitating continuous monitoring of the company culture.
For more information about employee stay interviews, our ExitRight® Employee Exit Interviews, or to schedule a demo, contact us today.
The company culture is just as important to a business’s success as any other aspect. Keeping your employees engaged in the company through various social activities allows them to feel celebrated and that their happiness is important. With the holidays quickly approaching, the question of “What are the plans for the holiday party?” may begin to arise. Some companies avoid these parties completely, just to avoid unnecessary drama. However, scrapping a holiday party altogether may not be the best option if you’re looking to maintain or grow morale into the New Year, so be sure to plan a celebration that best fits your company and employees – with minimal risk of turning into an HR nightmare.
“The overall morale of the company is down. A new regime has taken over and the company has lost its ‘family’ feel.” – Actual comment of employee leaving a company Every organization will experience times of change, particularly in times of exponential growth or when experiencing a decline. Leadership changes can prove useful, bringing new perspectives and opportunities, but with change comes anxiety. In order to maintain success and stability through the transition, efforts must be made towards employee retention. A leadership assessment and development of a process is a great start. People who have to make a change often see more of what they will be losing instead of what they may gain. Because those in management are the first to know of what is to come, employees can feel left out and uncertain about their future with the company. Thankfully, there are ways to help relieve the anxiety your employees may be experiencing:
Management teams and the human resources department have the important responsibility of establishing specific policies for employees, from vacation days to daily break allotments. Because breaks are not required by federal law, some businesses choose to provide employees with brief lunchtimes or breaks, leaving many sitting at their desks to work until it’s time to clock out. Not only that, but some employees may have the belief that being available and working constantly is the only way to achieve recognition at work based on management’s attitude or behavior. However, studies have shown that employees truly need good breaks throughout the day in order to keep engaged in their position with the company. According to Forbes, “Without taking adequate breaks from work, employee productivity, mental well-being and overall work performance begin to suffer. Overworked employees often deal with chronic stress that can easily lead to job burnout.” Of course, there are some employees you may run across that just love to work, but as a leader in the company, it is essential to encourage breaks for your employees to help them work to their best potential, benefiting the employee and the company. Tork, a business supply company, performed a survey to discover the importance of the lunch break, specifically in North America. According to the survey:
“Most of the people in IT are younger – hired out of college, or after just a few years of experience. As an older person with many years of experience (late 40s), the seemingly constant jokes about being old and not so sharp any longer became tiresome and not so funny to me.” – Actual comment of why an employee left a company Having several generations working together is extremely common, especially as more individuals find themselves having to work well beyond the typical retirement age. Creating a cohesive, productive team from these various backgrounds can pose a challenge, but with the right approach, is possible. Every employee has something to contribute, whether fresh out of college with the newest curriculum recently covered, or a seasoned workplace veteran with decades of valuable experience. Typically, the younger employees will have a stronger understanding of current technology, allowing them to be better able to adapt quickly to technological advancements and updated programs. Those who are older have more wisdom as a result of their dedicated work experience, bringing real-world experience to situations younger employees may have only theorized on in classes. Unfortunately, these differences could create a rift, where the older employees are perceived as less advanced and less useful, and the younger ones viewed as unmotivated and completely inexperienced. As the leader of any team, it is essential to help bridge the generational gap between your employees, which means you must understand them, as well. Talking with your employees and learning about who they are, how they learn, and where they strive to be will allow you to guide them towards specific roles that play to their strengths, ultimately helping the team as a whole. Organizational culture also plays a major role in bridging the gap, determining whether jokes about age, gender, and more are considered acceptable between coworkers. Does your organization have clear expectations with respect to diversity? Maybe the expectations were poorly communicated or are not regularly reinforced. Offensive jokes can lead to bad morale, turnover among employees, or even worse, potential legal problems. All employees, regardless of their age, want to be respected by others. No one wants to feel their contributions are not important because of their age or current level of experience. Help to reduce employee turnover by taking the time to know your employees and their skills, knowledge, abilities, and unique capabilities. Then, educate your employees on the values of everyone’s differences. Make sure you are leveraging everyone’s talents to the fullest to build teams that ensure organizational and individual success. You may think this could be a time-consuming process, but it’s really about communicating with your employees. Take time to get to know your employees. It will be time well-spent. To learn more about improving employee retention at your company with the help of comprehensive exit interviews, turnover benchmarks, and in-depth analytics, contact us today to schedule a live demo.
“The company needs to review and root out workforce bullies in this organization. There is a core group of four employees led by John Doe* and with influence from Sue Smith* that cause widespread problems that are affecting the company’s bottom line through confusion, lost productivity, low morale and employee turnover.” – Comment obtained in ExitRight® exit interview. *Names have been changed to protect identity. The Workplace Bullying Institute defines workplace bullying as repeated mistreatment by one or more employees in the form of either verbal abuse, threats, intimidation, humiliation, work interference, or a combination of any of these behaviors. Unless the employees affected or their peers step forward, it is entirely possible you may not even know it’s happening, quickly driving out your team members. It is possible you have a bully present in your office, but what should you as a manager do when that person is part of your team? The key to successfully navigating the liability associated with bullying is prevention. It is important to have credible data that allows employers to eradicate the bully. Often, employees will not speak up even in an anonymous survey. They are more likely to communicate the problem if they can safely share with a third party. There are products on the market that will flag certain words associated with bullying to help employers get ahead of the problem. For example, employee engagement surveys and exit interviews such as ExitRight® offered by HSD Metrics has word algorithms built into the technology platform. If employees use one of more than 160 keywords, employers will be able to quickly identify possible issues. The small investment in collected data is far outweighed by the potential cost of resolving a dispute. Either way, if the tip about a workplace bully comes from a current or former employee, it is essential to act and effectively resolve the issue. Once bullying has been confirmed, hold the person accountable. Too often, managers fall back on the “we’re all adults here” sentiment, leaving the bully and victim to work it out themselves. However, this will typically result in the problem escalating, harming any productivity even more. Be sure your team understands what constitutes acceptable behavior in the office, whether these are developed together in a group setting, or provided by your company. Bring each of your team members in for individual meetings presented as just a quick check-in on work-related matters to get their versions of the story. The person or persons being directly bullied should be separated from the offender, especially after any discussions, to help prevent retaliation. Once you have all of the facts, have the bully apologize and present them with appropriate consequences. Support those affected in any way possible to help make them feel more comfortable in the workplace. Be sure to monitor the bully’s behavior moving forward and let them know that if a line is crossed again, their termination is highly likely. Look in the mirror: Are you the bully? If you find that you’re always feeling as though your employees aren’t doing enough, or others seem to be avoiding you, it’s entirely possible that you are the bully. This may be a bit more difficult to grasp and change, as it relies on you hearing the truth from your team without going on the defensive, which can be hard to take. Talk to your employees and ask honestly what changes they would like to see in how you treat them or run the department – and be sure to implement their instructions. It may take some time for them to warm back up to you, but with continued effort and proven changes, you can reestablish a great employee-manager relationship. Another possibility is to implement a 360 feedback solution, which will help employees and managers understand the potential disconnects between intended and interpreted actions. Regardless of the source, it is important your employees understand that workplace bullying will not be tolerated. As a manager, you will need to investigate the claims and address any issues quickly, either to retain current employees or prevent more from leaving. If you are having any issues with employee retention, contact us today. Our provided metrics will help you measure your employees’ perceptions so you know exactly where you are excelling, and where improvements need to be made.
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