Addressing high employee turnover rates

EMPLOYEE turnover and keeping good people should be issues high on the priority list of anyone responsible for managing staff. If that’s you, keep reading.

There’s no question that employee turnover costs organisations money. From entry to exit, hiring, retention and exit figures for each employee contribute a large part to the lower half of the profit and loss.

And when that employee leaves, you’ve got to start the process all over again. Hours spent going through resumés and interviewing, away from your real focus of getting results.

For many companies it’s an endless cycle – a cycle that pours money down the drain.

What’s the answer? Well, obviously, slow down, or (heaven forbid) stop the cycle.

Most companies are doing some-thing about their retention issues. But how effective are their strat-egies? Common approaches to increasing employee retention include the quick fixes – team building days and pay rises – or add-on benefits such flexible work hours. These can work, but not in isolation.

Consider this: People don’t leave organisations, they leave managers. It’s all too easy to explain away high employee turnover through “we don’t pay enough” or “they weren’t the right fit”.

But if you look beneath these excuses you’ll find a different story.

A report published last year by research house Bavendam Research identified five causes of employee turnover: lack of commitment; unable to see long-term prospects; lack of job satisfaction; stress; and perceived unfairness.

As a leader or manager of people, how many of these do you think you have control over? Answer: all of them. You’re kidding yourself if you don’t believe you can have a major influence on an employee’s decision to stay or leave your organisation.

An article published by consulting firm The Hay Group in March shows that remuneration and benefits have only a 2 per cent impact on job satis-faction. An employee’s experience of his or her immediate supervisor accounts for 70 per cent of that person’s feeling about their work climate, and hence their job satis-faction.

These findings were confirmed a couple of weeks ago when I ran a focus group for a forthcoming workshop on Career Success. The group was comprised of managers, employees and free agents from a range of industries and professions. The question was asked: “what influences your job satisfaction and motivation at work?” The over-whelming response was “the amount of respect I have for my boss/ manager/leader”.

In fact, the free agents said they left their organisation to go out on their own primarily because of the lack of respect they had for the person they were working for.

What does this mean for you, the manager? Quite simply it means you should focus on creating an environment where your employees can thrive. Great leaders know their role is not to control, but to harness the collective energy of the people who work for them.

Some strategies to really improve retention include:

p Create a career development program for your employees. Provide the environment for your employees to explore their career options and align them with the company’s goals. Work with each of your employees to identify their own career motivators and options within the organisation that will keep them focused within, not without. This strategy may sound paradoxical, but it works.

p Remove unnecessary red tape and procedures. While some procedures are necessary, over-complex rules stifle creativity and initiative. Keep rules to a minimum, make information freely available and let go of control. Ask your people what will make their job easier.

p Be fair. Nothing upsets an Aussie more than being treated unfairly. Promote people for the right reasons. Discipline based on clearly laid out ground rules that apply to everyone. People will respect you more for being hard but fair, rather than being nice and unfair.

p Engage their commitment. Be clear on what you and your team stand for. Remind your team of why they exist and celebrate your wins. Walk your talk and encourage your people to do the same.

In the US, many companies now hold their managers accountable when employees leave. And rightly so. You have the power to engage the hearts and minds of your people. And in doing so you’ll free up time once spent interviewing replace-ments, and spend more time getting results.