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A client called me in to give
him a talent assessment of
his leadership team. This was
about a $50 million family
owned business, growing very
quickly. It was an interesting
project.
While conducting the interviews
I observed that they were doing
a lot of hiring. The business
was growing but the amount of
hiring seemed out of proportion
to the growth.
I discovered that the business
did not measure employee
turnover. They just accepted
that they had to keep hiring
because people kept quitting.
So I did a simple analysis and
discovered that the employee
turnover was over 50% for their
main category of employees.
That means that they had to
hire 50% more people every
year than they actually needed
to accomplish their business
goals. That is crazy!
I did a little more digging and
found problems with pay,
work environment and most
important management skills
or better stated, a lack of good
management skills.
It is costly to hire, train then
replace people on your team.
It can cost upwards of twice an
employee’s annual salary to
find and train a replacement.
In this company, 50% turnover
was costing them almost double
their labor costs. Reducing
turnover will reduce their labor
costs, reduce training costs,
reduce the time and cost of
hiring and most important
improve morale and the ability
to get something done.
Seems pretty important, doesn’t
it? Yet this company and many
other companies donotmeasure
turnover and even if they do,
they don’t do anything about it.
It is important to measure
turnover monthly and annually
to see if you are having issues.
If your turnover is higher than
you can tolerate, you should
figure out what is going on. Is it
management skills, something
in your environment or are you
hiring the wrong people? Only
by understanding the reasons
behind turnover can you begin
to address this insidious and
costly problem.
Here are some tips to reduce
turnover:
• Hiring the right people
is
the single most important
way to reduce employee
turnover. Interview candi-
dates carefully. Have a solid
hiring process that ensures
you understand the an-
swers to the 3 most import-
ant hiring questions: Can
she do the job? Will she love
the job? And will she get
along with the team?
• Pay attention to employees’
personal needs
and be
flexible where you can.
Get creative with work
schedules or day care
needs. Flexibility goes a
long way but it costs very
little compared to the cost
of employee turnover.
• Bolster employee engage-
ment.
Say thank you. Make
your workplace fun. Be sure
managers’ respect and rec-
ognize employees regularly.
Employee Turnover
What are they saying about
your business behind your back?
BY KATHERINE BURIK
SOAR TO SUCCESS
/
J
une
2016
/
Core Business Strategy