Quits are on the Rise: Do You Have a Revolving Door of Talent?
In May, the US Economy added 223,000 jobs and national unemployment reached a low of 3.8% (an 18-year low). There were 6.6 million job openings with the number of quits at 3.6 million (a rate of 2.4%). When the economy and job market were weak during the recession, workers were focused on simply maintaining their current jobs, even in some cases despite being completely miserable where they were, which caused the quit rate to plunge to a low of 1.3% in 2009. Today is a different story. We are in a war for talent. Dissatisfied workers are quick to look elsewhere for better opportunities, particularly in skilled trades such as in manufacturing, construction, CDL drivers, etc. where qualified workers are scarce.
Current and former employees are also much more likely to post their thoughts regarding dysfunctional and/or toxic workplaces on sites like Indeed or Glassdoor, which may deter prospective candidates from entertaining employment offers or even applying in the first place. Employers need to take great care to establish and/or review their employee retention programs, otherwise they may stand to lose some of their most valuable assets at a critical time when the economy is strong and business opportunities are abundant.
Many employers have great employee retention programs in place driving employee engagement in 2018 to an all time high; however, many still have programs that fall significantly short of their goal. And then there are those select few companies that give absolutely no credit to employee retention programs as they are still arrogant and ignorant enough to believe their employees should simply be grateful to have a job and that even if they leave, they are replaceable. Studies show otherwise. Is it any wonder that in this environment, according to a recent Gallup survey conducted for their State of the American Workforce Report more than 51% of employees indicated they are actively seeking employment elsewhere?
Losing valuable employees can be costly. In their 2017 Retention Report, the Work Institute estimates that it costs roughly 33% of an employees salary to recruit, hire and train that employee’s replacement. So, for an employee earning the median US salary of $45,000, it will cost about $14,850 to onboard a successor. For jobs requiring greater skill and/or education or for jobs in high demand with shrinking talent pools, this cost can quickly escalate. Some studies put the cost of employee turnover even higher, estimating replacing a valued employee can be 1.5 – 2 times that employee’s annual salary. Empty positions can also add additional stress to other workers who have to assume the workload for an employee that has departed, which can make those other employees unhappy and potentially trigger their own job searches. There is also the soft opportunity cost a business must incur for the time it takes for a new employee to become truly acclimated. Depending on the position, this opportunity cost could include 1-2 years of mistakes and lower production.
For some employers, determining how to retain their top talent is still an unsolved mystery. Following are a few suggestions compiled from a number of different industry studies that can help employers F-A-T-H-O-M what is most important to their employees:
With the struggles to maintain work-life balance, many employees are appreciative of flexible work schedules that allow them to work some days from home or have flex hours. In response to a survey by Regus, 79 percent of employees would choose an employer that offered flexible work schedules over one that did not.
In addition to regularly assessing employees and providing feedback outside of the annual review, employers should give even more focus to assessing themselves. How do your benefit offerings stack up against competitors? What do your key employees value most to keep them engaged and ensure retention of your top talent? Are there processes and procedures that are performed simply because that is the way it has “always been done”? Having the ability to objectively review what your company can do better to provide the best work environment for your employees and attract new talent is key to surviving in a thriving and competitive economy and job market.
Training, Technology and Tools
Providing immersion training as well as ongoing training helps employees to perform their best and feel successful in their roles. So many employers fail to provide adequate training to new hires and then cannot understand why an employee is not meeting their company standards and expectations, when in reality they were never communicated properly to them and they did not have the proper coaching and instruction. In addition to training, providing your employees with the right technology and tools to reach goals and expectations can have a significant impact on employee engagement and satisfaction. Most workers strive to be productive and when you have archaic systems in place that impeded production and require redundant work, top employees can quickly become frustrated with their jobs.
All too often when hiring for an open position, companies look for those individuals who “interview well” rather than hiring for necessary skills. In a 2013 study on recent graduates conducted by New Zealand industrial psychologist, Jeff Simpson, Phd, he did a comparison study of individuals who were identified to have narcissistic personality traits versus non-narcissistic individuals. In his findings, Simpson noted that the narcissistic candidates were most often offered top positions and were seen as too good to pass up, but when it came to their actual work performance these “star candidates” fell rapidly. While those candidates identified as non-narcissistic quickly rose as they tended to be, “more self-critical when rating their own performance” and thus “tended to work harder at getting up to speed with what they didn’t know – it bothered them, so they tended to perform better because of it.” The results of this study are not surprising given that typically those who are good at talking about themselves are generally narcissistic and therefore can easily sell themselves, while others feel that talking about oneself borders on bragging and prefer to show their strengths in the quality of their work rather than in speaking of their own performance. So the lesson is, as part of your talent acquisition efforts, be sure to ask the right questions and use a critical eye to flush out narcissistic candidates. If it seems too good to be true, it probably is.
Giving your employees opportunities for advancement and/or to excel in their current positions, helps employees to feel valued by bettering themselves, which can only benefit your company. In its Employee Engagement Research Update published in January 2013, BlessingWhite noted that 27% of “Engaged” employees would leave or have left their job because they felt they lacked opportunities to grow and advance. All of the categories assigned to employees in the study (Engaged, Almost Engaged, Crash and Burners, Honey-Mooners, Hamsters and Disengaged) also ranked “More opportunities to do what I do best” and “Career development opportunities and training” as top contributors to satisfaction and engagement.
Managers, Managers, Managers
Just as location, location, location has a significant impact on real estate success, managers have the same impact on the success of your employees and subsequently your business. Another key aspect of training that employers frequently fail to provide is sufficient training for management staff to continually improve their people skills. In a study by SurveyAnalytics.com, it was found that, “75% of people voluntarily leaving their jobs don’t quit their jobs; they quit their bosses.” Bosses have a very direct impact on employee morale and retention. Having a bad hire in a management position can result in a detrimental increase in employee turnover. If you have a bad boss in one department or area, it is typically not all that hard to identify – look at the turnover rate by department or manager. Even if departing employees do not directly call out their managers in an exit interview (most do not wish to burn bridges and will be diplomatic and carefully choose their words), as they say, numbers don’t lie.
Working strategically to ensure your company can attract and retain top talent will be imperative to your company’s continued success and future growth. Let’s face it, if you don’t value your top performers when the economy is strong, someone else will!
Implementing CheckmateHCM as your enterprise-wide Human Capital Management Solution can help you measure, manage and carry-out your strategic initiatives to attract, retain and reward talent. Our solution provides powerful tools and real-time analytics from pre-hire to retire via a single database, secure cloud solution to help you identify trends, track employee success and engagement and manage your talent throughout the employee lifecycle.