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Leadership Insight: The Great Turnover Bubble

Guest post by: Tim Schneider

Article Overview: It may well become the great turnover bubble of 2011. Or maybe 2012. The turnover bubble that is referenced has been created by economic conditions that began largely in 2008 but have been festering ever since. The bubble relates to a great number of people that would like to change jobs but cannot because other jobs are not available. When those jobs become available again, the bubble will burst and we will see a large migration of talent between companies and organizations.

Leadership Insight: The Great Turnover Bubble

It may well become the great turnover bubble of 2011. Or maybe 2012.

The turnover bubble that is referenced has been created by economic conditions that began largely in 2008 but have been festering ever since. The bubble relates to a great number of people that would like to change jobs but cannot because other jobs are not available. When those jobs become available again, the bubble will burst and we will see a large migration of talent between companies and organizations.

The bubble came to be built as higher levels of unemployment caused potential job seekers to cool their jets and stay put. Job seekers that were currently employed did not want to embrace or even tolerate the normal levels of risk associated with changing jobs. The sure thing of their current job was far easier to tolerate than the potential of moving to an unstable organization.

Further worsening the potential of the turnover bubble was that many organizations experienced deteriorating working conditions during the same period of time. Wages and benefits were cut, staff sizes reduced, working hours increased and the bosses became more and more surly. What used to be a great place to work was now just a place to work. At least for the time being.

Many managers and human resource professionals drank the Kool-Aid that the lack of turnover at their particular organization was a sign of good health. Even worse, they used the non-existent turnover ratio to continue the eroding of working conditions and terms.

To attack the turnover bubble, turnover itself must be examined. Long considered a good indicator of working environment, it is at best a hollow indicator of team member satisfaction. During the past three years, when someone left, many of those jobs were not replaced. No turnover. When reductions in force sized occurred, no turnover was recorded. A critical position is filled with someone from another department. Again, no turnover.

Turnover is very low so therefore everything must be right in the workplace. This assumption could not be more wrong. Some staffing firms and survey groups now estimate that between 25 and 40 percent of all working professionals would change jobs for the same or slightly higher compensation if the jobs were available. The estimated turnover numbers jump dramatically when compensation rises by more than 10 percent.

Think about that for a minute. How devastated would your organization be if you lost a quarter of your professional staff next year? What operational impact would that have? Could you refill the positions or would you be forced into a costly bidding war to keep your existing talent? Before the turnover bubble is tamed, there are a couple of very base considerations. Using Maslow’s Hierarchy of Needs, there is a population of your team members, usually the lowest compensated groups, that will leave for very modest increases in compensation. Fifty cents more an hour is meaningful to them and the added family revenue is needed for survival. Although Maslow’s original intent of his second tier was physical safety, a good chunk of the turnover bubble will also relate to career security. People will change jobs to seek greater degrees of job security and this will benefit public sector employers that typically have less chance of layoffs. Larger employers with a track record of keeping employees may also benefit.

All of this leads to how we attack the turnover bubble now and prevent it’s impact of imperiling our business operations. Also using the old science of Maslow, organizations need to proactively address the three highest levels of the hierarchy to minimize the impact of the bubble bursting. All of these strategies are pretty easy to implement and can be undertaken by all leadership levels of an organization.

1. Provide Opportunities for Social Interaction

Many of our team members come to work to interact and make friends out of their co-workers. Provide simple opportunities such as pot luck lunches, common break times, group activities and picnics for them to laugh and enjoy each others company. As the leader, it is your job to organize the activity but provide plenty of space so that you are not the focal point.

2. Provide Heaping Doses of Positive Feedback

Nothing will increase self-esteem as quickly as using a great deal of positive feedback. Praise them. Thank them. Be sincere and never tie positive feedback to any corrective or improvable item.

3. Meet, Connect and Build Relationships

The most effective strategy here is the consistent use of regularly scheduled one-on-one meetings with team members. These meetings provide the impetus to build rapport and humanize connections. Group meetings never provide that type of opportunity no matter how you create a meeting environment.

The other powerful tool in area is to demonstrate interest in your team members. Learn about them, follow-up and ask about things that are important to them and not just important to you or the company.

4. Insure Workplace Security

This strategy has nothing to do with guards or alarm codes. This is all about making sure that the environment is free from bullying and harassment. Many experts believe that like the turnover bubble, there is a large amount of unreported inappropriate workplace behavior.

5. Provide Learning Opportunities

While you can’t promote them or pay them more, you can provide them with meaningful job skills that improve their value. Learning opportunities, both formal and informal will connect people back to the organization on more of a career path than just a job.

6. Provide Flexibility

Allowing different start times, end times and lunch periods are a great tool to achieve greater satisfaction and customize their job. Do you require them to start at 8:00am because that is when everyone else starts or is there a real reason for that time? Flexibility is like solid gold to many valuable team members.

These six strategies alone will not guarantee that you are not impacted by the turnover bubble but they will go a long way in minimizing the depth to which the bubble will harm your organization.

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Article Tags: culture, leadership, management, morale, talent management, turnover



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