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Reasons for Turnover!

Written by: John M. Beane

Article Overview: Resolving turnover issues is not too difficult if one is committed to taking the appropriate actions.

Reasons for Turnover!

Many years ago, when managing a company with several dozen employees, I began to ask, “Why do my employees leave?’ My first thought was to blame them. They wanted more money than I could pay, they didn’t appreciate what I was offering, they wanted an easier job, etc.

But, when I began looking at myself and how I ran my company, I began to realize it had little to do with them and far more to do with me. I did not hire the right person for the job and then I didn’t provide the orientation and training they needed to be successful in the job. In other words, I had thrown a ‘warm body’ into the position and expected them to succeed.

So, I began analyzing what a particular position would require a person to do in order to make them successful in the job and what sort of person could be happy with what I had to offer them. When I began this analysis, my annual turnover was generally in the neighborhood of 200%. At the time, I thought that was not bad since that seemed to be fairly typical of similar businesses around me.

But, as I began to change the method of hiring people and began to offer them something close to what they wanted, I made an amazing discovery. My turnover dropped to very low levels and my profits were increasing at an astounding rate. At the time, I did not know how to calculate what turnover was costing (for more information on the cost of turnover read my other article on calculating the cost of turnover) and, since my employees were mostly minimum wage, I didn’t think it was much. Boy, was I wrong!!

In the years since, working as a consultant, I always recommend clients to look at turnover as a root cause for many of the problems facing them. There is one experience in my consulting career that really exemplifies this. I had a client that lost the ability to manufacture a quality product after it lost every employee who knew how to keep the process in control. None of the previous employees had passed their knowledge to the newer ones. This is hard to believe but, if an item with enough quality to be sold was produced, it was by accident. I know this is an extreme example but it illustrates what turnover can to do to an organization.

So, why do people leave a job and move on? For years, the answer has always been money or, at least, that’s what managers thought. That is not right but it is an easy answer that takes responsibility off the manager. The burden has to be placed on the manager since they ‘own’ the jobs and have some degree of responsibility for filling the positions.

Over the years a lot of studies have been conducted on why people leave one job to take another. In all these studies, the reasons don’t vary much but the importance varies, depending on the organization.

- Poor job fit: This is one of the most common reasons people leave. They are dissatisfied with their current employment because they are not well suited to the requirements of the job. (Example: Jane has strong courage and direction so she works best if she can determine goals and how to achieve those goals by herself. But, in her present job, she is expected to share the decision making with a group of people which is frustrating to her.) If a person does not fit the job, they can become so dissatisfied and unhappy that they focus on just finding another job instead of finding another job that fits their needs. We do a disservice to that person when we hire them.

I was consulting with an insurance office when they were considering a new hire who was working for another insurance company at the time. When asked why she wanted to leave her present employer, she said she did not like a team environment. She was informed that this office was about to institute teams but she said that she didn’t care she needed the job.

Would it have made sense to hire her? Not really, since she would be leaving one job environment in which she was not satisfied to go to a similar one.

This makes it imperative that the person responsible for hiring understands what is needed in an employee to make them happy and successful in a particular position. This ensures that the right person is placed in the right job.

- Too little feedback on performance: Most of us need to know how we are doing in our job. If we don’t get any feedback, we don’t know how to change in order to improve our performance or even if we need to change. And, if we only get negative feedback, we know what we should not do but have no idea of what we need to do.

As a consultant, I use recurring clientele as a ‘feedback loop’. If I do good work on one project, I will probably be considered for future ones. If I don’t do well, then I won’t be rehired. But, what about the employee who shows up day after day with little idea of how they are doing?

I recommend a monthly ‘one on one’ meeting so that the employee and his or her manager can discuss performance. The manager can praise the employee for what they are doing well and point out one thing they could improve upon. In the next meeting, the manager can give feedback on that issue. The manager also needs to ask the employee for feedback on how they are doing as manager and what they might do to improve their performance. This only takes a few minutes but can have a major return on the time invested.

This is beneficial to the employee for a couple of reasons. It makes them feel that they are part of the team and that they have some responsibility for helping the manager improve. It also lets them know that the manager is aware of what they do. If you look at studies done on why employees leave, the first two things just discussed will resolve most of the turnover issues.

- Little career opportunity: This is the single most difficult issue for small organizations. Where does a person go if they leave their job? Too many managers want to keep good employees in their current role since the manager’s success hinges upon getting the work done. But, this is short sighted for several reasons.

For one thing, some people get tired and bored if they do the same thing year in and year out. Great employees lose their edge and become average if they aren’t given new challenges. Average employees become so good at doing their work they lose their motivation and become below average performers. Boredom with one’s work is deadly to employees.

When a new employee comes on board, a good manager lets them know the various paths that may be open to them and what they need to do in order to grow within the organization. This allows the new employee to decide upon the path they wish to take and to determine what they need to do to get there. And, now their manager can mentor them for growth rather than trying to push them.

In the book, Good to Great,Jim Collins states that the single most important issue to any organization wanting greatness is to have the right people on the bus. And, more importantly, once they are on the bus, they must be in the right seat. A good manager makes certain they get the right people in the organization and then helps them find the right seat.

By doing this, an environment is created in which the employees are self-motivating and working continually to improve all the various elements of the organization. When people are this involved in what they do, it becomes their passion and they become even more motivated. And, employee turnover becomes a thing of the past!

Related Articles
  Turnover is Not a Problem
  Understanding and Calculating the Cost of Turnover
  Reference Checks; are they reliable?
  Lousy Salespeople and Great Salespeople - Line Item or Investment?
  Turnover, what does it cost?

Article Tags: annual turnover, astounding rate, discovery, dozen employees, first thought, job, minimum wage, money, neighborhood, orientation, profits, quality product, root cause



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