Here are highlights from the sixth in a 13-week series of broadcasts on HR Trends, a special edition of Coffee Break with Game-Changers on the business channel on Voice of America Internet talk radio. During this series, industry experts are discussing a variety of topics trending in HR today, such as this one on attrition and retaining good employees.
What kind of attrition battles are companies facing today – and how do they raise retention rates to keep the good employees? This was the focus of this week’s radio broadcast with China Gorman, Chief Executive Officer of Great Place to Work, and Dr. Stephen Hunt, Senior Vice President of Customer Value at SuccessFactors, an SAP company.
Attrition is costly in more ways than one!
While employee attrition is a fact of life, there are times – like now – when it’s more prevalent than others. Job mobility, social recruiting, talent poaching, and generational differences are driving more turnover today than ever before. And for companies that
continually lose top, prized talent, this attrition can be painful and disastrous.
In addition, attrition is costly. In fact, losing and replacing an employee can cost tens of thousands of dollars – and sometimes, even more than a person’s annual salary. There are, of course, recruitment costs, but also training and onboarding costs when a replacement is hired. The loss of a highly skilled employee and the loss of his or her institutional knowledge can have an immeasurable effect on the culture, fellow employees – and the entire organization – resulting in lower productivity. And
sadly, quite often when one person leaves, it triggers others to move on as well.
Turn the tide – and increase retention
So what can companies do to stop high attrition rates? Here are a few tips from our experts.
- Invest in employees, because they really don’t want to job hop. If given a choice, most people want to stay where they are employed. But if their jobs don’t give them a reason to stay, leaving is easy, especially in this market where there is a short supply of skilled workers. So it’s important for organizations to invest in people and help them develop skills and
competencies, which creates tenure with the company, not the job. In fact, not investing in employees is a retention risk.
- Give people meaningful work. Longevity and effectiveness will increase if employees feel like they are creating value. Simply put, in today’s world, highly professional people want to make an impact – they are not necessarily craving excitement, but meaningful work of which they can be proud. And when it comes right down to it, employers want employees to have great careers that are fulfilling for them personally and professionally, so when there is value, it’s a win-win.
- Create an environment of trust and transparency. People want to work in an environment where they like their team and in an organization where they trust the leaders to be competent, respectful, and grateful for the work employees do. Managers are the link between senior management and employees, so they should have front-line training in conveying value, openness, and transparency.
- Show respect and appreciation. Related to meaningful work and value, employees want to feel respected and appreciated for their contributions. People just don’t quit all of a sudden – it happens when disrespect is triggered. And if they are the skilled high-performers, prospective employers will be all over them, potentially offering people everything that they feel they are now missing. It’s important, therefore, that employees are recognized for their contributions regularly, and often.
- Adapt as people change. In any job, different aspects of a position mean different things to different people at different times in their lives. For instance, meaning and growth is important for the younger Millennials, while stability might be more important to Baby Boomers. At the same time, it’s important to remember that people are always changing and they want to be
continually challenged – they won’t be doing the same job in five years and they cannot tolerate stagnation. But these factors don’t mean they need to change companies to achieve what they desire. As long as people see their profession and career advancing with meaningful work, they will be less likely to leave. As companies recognize the nuances of change, they can adapt the work environment to keep employees longer.
- Use poaching advantageously. No one wants to employ someone that no one else wants to hire – in fact, it’s a given that if people are good at their jobs, other companies will want to hire them. Open relationships with employees encourage them to alert managers when they are being courted, so the company can respond appropriately. On the other hand, when poaching happen secretly, it’s a sure sign that trust was not earned. All employees will leave at some point – the question is will it be in an open, managed way, or will they sneak out the door?
The crystal ball: What will flexstyle look like in 2020?
Here are predications from each expert on what future of attrition looks like:
- Gorman believes that the gap between companies that are focused on a culture where employees are respected, appreciated, and developed – and those that don’t – will widen. Turnover will rise in the organizations that treat people as dispensable
and disposable, like cogs in a machine. By contrast, turnover will decrease in the organizations that are focused on an employee-centric kind of culture where almost every employee is satisfied. And those organizations with lower turnover will win the competitive game, whether it’s locally, nationally, or globally.
- Hunt there will be companies that excel at having very transactional contingent workforces, with a high turnover model where
there is little expectation of long-term loyalty. He sees organization getting good at defining exactly what they want employees to do, paying them more for doing that, and being okay when the employees leave. Conversely, companies that don’t treat employees right and have sub-par management practices are just simply not going to be able to keep high-performing talent. And eventually these companies will disappear because they’ll fail due to the lack of good talent.
You can hear the full broadcast on workforce attrition here, including more on the role of leadership in this challenge. Listen to other recent HR Trend Radio Shows, including ones on baby boomers, workplace collaboration, technology in the
workplace, HR for startups, and work-life balance here.