Fortune recently reported the ‘Top 100 Companies’ turnover figures at approximately 2-3% per year. Now compare this with the US national average of 2-3% per month, that is, an average of 24-36% of employees leaving US organisations every year. A 2007 Department of Labour report put the percentage of New Zealand workers having been in their job short of a year at 38.8%, a percentage not directly comparable, but thought-provoking nonetheless.
Now, the worrying bit: it is suggested that the average cost of replacing a professional is approximately the annual salary of the individual. For example:
An average company of with approximately 200 people, with an average salary of $50,000 will be losing up to $3.6 million annually replacing the lost staff. A US Top 100 Company would be spending less than a tenth of this. Care to do the figures for your organisation?
If your figures are high, then chances are you won’t be able to put this purely down to industry, the economy, the industry, fate, the price of milk, only your organisation itself. Consider the following tips in getting your figures down:
- Get the right people first time around. It is vital that you are getting the right people in to the right spots on your bus. If you fail to do this employees will be disembarking well short of the organisation’s destination.
- Fit the employee; don’t make the employee fit you. Rigid policies and procedures don’t tend to fit well with Gen-Y’s, Gen X’s and highly skilled employees – flexibility is a must.
- Increase the quality of leadership/supervision. “People leave their manager, not their organisation”, a truism of ever-increasing career-mobility. Improve the quality of leadership at all levels—proactively seek areas of weak leadership.
- Find out the real reasons people are leaving. A casual exit discussion won’t be enough—most will not want to speak freely straight to an ex-employee. Outsourced exit interviewing will elucidate the real reasons.
- Effective on-boarding. This is an area often overlooked. First impressions matter more than most of us think, and with on-boarding there is no second chance. This presentation by Dr. Sarah Burke is a must watch in this regard.
- Provide clear opportunities for career development. Ensure your organisation has well-defined career pathways for those of the ambitious ilk.
- Eradicate organisational ill-will. Proactively seek out employees with negative sentiment towards the organisation and work with the individual(s) to minimise this. Think: 360s, mentoring, culture surveys, engagement surveys, and the promotion of transparency.
- Show appreciation. Time and time again organisations do not give praise where praise is due. This is a common blind spot. We suggest you look with an exceptionally critical eye as to how well you do this.
- Do not under-staff. Consider temporary staff if you have to. Costs saved in under-staffing may come back to bite the bottom line.
- Share knowledge. Employees tend to love sharing what they know. Ensure channels of information flow are open upwards and downwards.
- Make work fun. Employees will tend to engage and enjoy themselves when they are encouraged to build on their strengths. Encourage safe laughter!
If you would like any advice on how you can reduce your turnover, please contact your local OPRA office.