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The Employee Turnover/Retention Issue

Why They Leave? / How Can We Encourage Them to Stay?

There is practically no debate about the premise that high employee turnover is a bad thing and something to be avoided. There are the obvious costs of recruiting and hiring new personnel as well as the costs of training new employees. In addition, there are "hidden costs" which can be even more significant. These costs include poor customer service, the need to redo work, unfocused management, and possibly lost customers.

Why do employees leave? The usual assumption is that people leave because they have found a better paying job. However, a recent survey indicated that this may not be the case. The survey asked employees which factors were most important in the decision to leave their jobs. Twenty-six percent said their perception of managers being inept was the primary motivator for quitting. Managers were cited for poor communication, being overly critical and petty, taking credit for their employees' accomplishments, being unclear in giving directions, rudeness and a general lack of support and performance feedback. The next significant factor (13%) in the decision to leave was "no career growth potential". "Inadequate compensation" was tied with "poor training program" and "inadequate performance appraisals" at 7%.

What measures can be taken to reduce employee turnover? Listed below are some strategies which will likely reduce turnover in most organizations:

Hire the right people Better decisions on the front end of the employment relationship will bring positive results. Pre-employment assessment tools and behavioral based interviewing can help an organization make better hiring decisions.

Pay competitive wages Raising pay is not an automatic means to avoid turnover; however, paying too little during low unemployment may result in the loss of some employees. Paying competitive wages is important but it is not the only method to improve employee retention, nor is it a guarantee.

Integrate for success The first few weeks of employment are the most critical to lay the foundation for long-term commitment. A well-planned orientation program demonstrates commitment to a new hire. Some organizations have found that a mentoring process is very helpful. A co-worker or manager is assigned to each new hire. The mentor's role is to help the newcomer reach a comfort level within the new work environment. This rapport and relationship building can be a key element in putting the new employee on a track for success in the organization.

Phase in training Rather than throw a new employee into several weeks of job-specific training right away, start with the basic, essential training. As the employee gains experience, offer further training in recognition of his or her growth.

Provide growth opportunities Employees are taking ownership of their careers and recognize the need to refine and upgrade their skills. Accessible and relevant training increases the likelihood that turnover rates will decline.

Motivate — Assess the underlying motivators for work beyond the paycheck. Provide recognition, and design strategies to reinforce what matters most.

Enlist problem solvers When possible, invite employees to help solve company problems. A shared approach creates ownership for employees in the organization's success.

Make rewards count Rewards should be immediate, appropriate and personal. Receiving a bonus check at year-end may mean less than smaller, frequent pay-outs. A personal note usually means more than a generic award.

Recognize longevity Employees appreciate an employer who honors long service.

Improve communications Tell employees periodically about the advantages of employment with your organization. Utilize employee opinion surveys and benchmark competitors. Demand that good communications be a priority for all managers and measure progress.

Respect employees Loyalty, like respect, is a value that appears to be reciprocal. People do not necessarily commit to an organization; they commit to co-workers and culture. Employees are most content when they can become an integral part of their work community.

Focus on the exit interview Knowing why employees leave is instrumental in understanding turnover. Tracking the reasons for departures may uncover patterns that, when addressed, will help stem further turnover.

These measures have been successful in reducing employee turnover. While each measure may not be appropriate for every organization, any organization will find some of them practical and beneficial. Implementing these measures can reduce the high costs of employee turnover and assist in the retention of a productive, loyal, and satisfied workforce.

SESCO Management Consultants is available for assistance should you have questions about employee turnover. You may contact us by phone at 423-764-4127 or by email at .