High Employee Turnover = Bigger Problems

Dec 3, 2015

What’s your retention strategy for unhappy employees?

It’s often what you don’t know that can hurt you the most. As a manager, you can plan for everything from holidays to project deadlines, but you can’t properly prepare for the unknown. If you don’t know that your company has a problem with employee turnover, you can’t devise a suitable retention strategy to solve the problem.

Employee retention has become a hot-button issue lately, as more and more companies want to avoid the high costs of onboarding and retraining. As a manager, you may watch for signs of employee turnover, but the question remains — what can you do about it?

Catch the Problem Early

Look what happened with Amanda: She was gung-ho when you hired her. She put in extra hours to get up to speed and then more time to finish her first project on deadline. But that was several years ago.

Since then, several members of the team have left the company for various reasons. As a result, Amanda has “inherited” both increased responsibilities and a heavier workload. Now, while she works diligently throughout the day, you notice that she leaves exactly at 5:00 pm every day. And she rarely smiles anymore.

When you discover that she has applied for a job at a different (or even competing) company, it hits you that this is a problem you’ve experienced before, maybe even with others who have been in Amanda’s shoes. You didn’t know what to do then and you don’t know what to do now. If you don’t have a retention strategy in place to deal with this situation, you can bet that you’re going to see the same issue again and again.

Determine the Cause

In Amanda’s case, your best course of action is to talk to her to find out what she’s thinking, if she has any solutions and what you might do to earn back her enthusiasm. This is a “best practices” policy for all managers, which should be part of an ongoing company policy for management.

You should be speaking to all your employees on a regular basis to gauge their feelings and satisfaction levels. Remain approachable so your staff feels comfortable coming to you with issues as they arise. However, some employees may not be forthcoming about the real cause of their dissatisfaction with their jobs.

Examine the data regarding Amanda’s role objectively. Some things to consider:

  • Have others in her current position left the company?

  • Is her pay scale sufficient for her duties?

  • Does she have too many responsibilities?

  • Is the pressure to perform too great?

  • Are her deadlines unreasonable?

  • Has high employee turnover caused morale problems?

Address the Underlying Issue

In an ideal world, you determine what the problem is and address it directly. In the real world, you may find multiple problems, such as everything listed above. There may be a problem you can’t fix right away, like a depressing or oppressive company culture.

But you certainly can take steps to correct employee turnover for those challenges that are under your control. Start by devising a retention strategy that will help alleviate the problem before it gets unmanageable. For example:

  • Offer Amanda help (in resources, personnel, or both) for her current projects

  • Provide guidance and advice

  • Find out if she’s having problems at home that are affecting her work

Your efforts may help for a time. But then the other shoe drops. Amanda tells you she’s received an offer from another company. She’s considering it. She’s not given you an actual notice, so that means she hasn’t made up her mind yet. Now is the time to ask her directly what she wants in order to make staying more appealing.

What’s Your Retention Strategy?

You may believe at that point you have two choices:

  1. Make a counteroffer to keep her.

  2. Start planning to replace her.

The first option may not be successful. You may have no way to know how much the other company is offering in terms of salary, benefits and perks. Even if you can match or beat the offered salary, there may be other factors that are driving Amanda’s decision to leave.

The second option is hardly a retention strategy at all. If your retention strategy involves surrender, you have larger issues to deal with. You obviously have to take some action. Amanda herself is giving you the opportunity to do something.

To Counter or Not to Counter

Deciding to make a counteroffer can strain your sense of judgment. A counteroffer implies that Amanda was indeed underpaid ever since she moved into her current role. And if she accepts your counteroffer, it implies that money might be the only thing that motivates her. Both of these implications create negative associations.

If your retention strategy involves making counteroffers, make sure it’s for the right reasons. While a counteroffer may be less expensive to the company than rehiring someone to take her place, it can have negative effects on both the employee and the team. And while it may solve a short-term crisis, it just opens the door to more problems down the road.

What Employees Want

Most employees don’t want to leave their current jobs. Change is difficult. Change involves risk. Maybe the new job will be worse. While there are obvious exceptions to this rule — such as executives who change jobs to advance their careers and employees who move to a different city — you should use the “human tendency to avoid risk” to your advantage. To fight employee turnover, assess what employees like Amanda really want.

Here is a list of common reasons employees change jobs:

  • More money/better compensation

  • Hopes for a better boss

  • Different company culture

  • Opportunity for advancement

  • More flexible hours

  • More vacation/better perks and benefits

  • Better location

  • More stability

  • More challenging role or project

  • Appreciation for her contributions

What You Can Do

All the reasons for employee turnover are common. People spend a lot of their waking hours at work; the environment had best be tolerable. In fact, while it might hurt your ego, the manager-employee relationship is often the first thing cited as a reason for leaving a job. So while you may not be able to change your company culture, you certainly can work to repair your relationships with your staff.

The last reason in the list above involves a lack of appreciation, whether real or perceived. This little-discussed issue can cause more employee turnover than you suspect. All employees want to be recognized for their efforts. That doesn’t necessarily entail trophies or gift cards (although these things are sometimes appropriate), but it does involve attention.

As Amanda’s manager, it’s up to you to let her know how she’s doing. This goes back to the earlier recommendation to meet with all your employees on a regular basis. And if Amanda does something noteworthy — finishing a project, taking on more responsibility or successfully mentoring a new hire — by all means, recognize her accomplishments to the team.

You Can Fight Employee Turnover

If your retention strategy fits your business model, your corporate structure and your team dynamics, chances are it will work to keep your employees engaged, challenged and gratified in their roles. It’s up to you to make sure all your employees want to stay with your company. When your team is happy, you look good, and you put a stop to that high employee turnover problem in its tracks.

About the Author

Charlie Kimmel

As President and CEO, Charlie has dedicated his 25+ year career to executive search at Kimmel & Associates. Charlie began his career at Kimmel & Associates in 1990 as a Recruiter. In 1993, he graduated with honors from the University of North Carolina at Asheville, where he received a BA in History.

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