Why Are My Workers Leaving?
Do you ever get the feeling you’re running a half-way house instead of a business? High staff turnover is a growing issue for companies today, especially as the employment market improves, providing a myriad of options for ambitious and career-minded workers. A high attrition rate is incredibly detrimental to a business, and affects not only the culture and working environment of a business, but its success, and perhaps even its ultimate survival.
There is certainly more employee turnover these days compared to a generation ago, and this is due to a range of factors. Job security used to be paramount for most workers when your parents or grandparents were working. Often a “job for life” was seen as the pinnacle of a successful career. It usually didn’t matter if you enjoyed your job or not, as long as you took home a steady income to provide for your family. These days, through an abundance of opportunities and the global marketplace, young people don’t have to be tied to one place and one career path anymore – they have the world at their feet (and fingertips, thanks to the Internet), and they seek out what gives them meaning and pleasure in their lives.
The downside to this new world of endless opportunity is that companies can lose good workers at the drop of a hat, and high employee turnover leads to big problems in business. In Asia now, it is common to see staff attrition rates of up to 30-40% per annum and higher in the Gen-y demographic. A variety of studies have shown the true cost of losing just one employee, and it can range from tens of thousands of dollars to twice their annual salary!
HR expert Josh Bersin from Deloitte Consulting outlines the total cost of losing a worker:
- Cost of hiring a replacement
- Cost of training and managing the new recruit
- Lost productivity as the new employee gets up to speed
- Customer service errors, resulting in fixing costs
- Negative effect on team culture as others ask each other why they left
But the biggest impact of a good worker leaving is the loss of their discretionary effort on the value curve, as Bersin illustrates here:
Fig 1: Economic Value of an Employee to the Organization over Time (C) Bersin by Deloitte
So how can owners and managers retain good workers, and keep their businesses running smoothly and successfully? What keeps employees in your company? What are the staff retention drivers?
- Money. How much someone gets paid is a factor, but most of the time it’s not the most important reason why people leave.
- Job fit. This is critical. If a worker feels there is a mismatch in expectation they are often prone to look elsewhere. Over the years we have interviewed hundreds of employees seeking to leave due to the fact that the role they interviewed for is different to the one they actually do.
- Career opportunity. The younger generation defines a successful career differently to their parents. They look for personal growth, a sense of purpose, being around other like-minded people, connecting and having fun.
- Work environment. Once a new worker is settled into a role, they start to look for a challenges and yes, meaning in their jobs. They want to utilise their skills and contribute positively to the business. They want to feel appreciated and valued. Often times, good workers don’t leave companies, they leave bosses.
You can see from this that most retention drivers are related to an employee’s sense of belonging and engagement with their colleagues and their company.
According to a study by the Corporate Leadership Council, “highly engaged” employees were 87% less likely to leave their companies than workers that are “disengaged”. A Gallup study of over 23,000 businesses showed that organisations that scored in the lowest engagement quartile averaged 31-51% more employee turnover than the other business units.
From these observations, it’s obvious that the key to retaining good people and minimising staff turnover is getting them engaged in their work and their company. But what exactly is employee engagement, and how do you increase it within your worksite?
Kevin Kruse, author of ‘Employee Engagement 2.0’, defines employee engagement as “the emotional commitment an employee has to the organisation and its goals, resulting in the use of discretionary effort.” We all want to feel a part of something that has meaning and purpose. The more we are invested emotionally, or engaged in an activity, a person, or an organisation, the more effort we put into nurturing that entity and the more we strive to succeed.
The most successful companies have the most loyal employees. That’s because they not only value their workers, they make sure their workers know they are valued. Greater employee engagement not only means more staff retention, but also better sales and service, quality of work, safety, and revenue.
In today’s expanding global economy and shifting demographics, the businesses that adapt and grow are those that invest in the engagement of their people.
These days that’s not so easy. Everyone is too busy meeting deadlines and targets, and the pressure to perform is higher than ever. Who has the time to mentor or develop staff when there are much more important and urgent things to be done?
The time spent coaching or developing a worker is less than it was a few years ago, as companies focus on getting the most productivity out of their workers, and workloads are increased. Manager/subordinate meetings tend to just be progress updates (are you on track to meet this week’s targets?). As such, the relationship is superficial, and there is little bond between them. When someone doesn’t feel their presence in the workplace is valued, there is no sense of loyalty, and they find it easy to leave in search of something better.
The good news is that you can vastly improve employee engagement and development without spending a lot of time doing it – it’s about being smart and having the right tools.
Simple, short conversations structured in the right way, can produce results you didn’t think possible. It’s time to bring the mentor back into the workplace, but also into the 21st century, utilising new concepts and techniques that will ensure your company is well ahead of the pack when it comes to retaining talented workers and growing your business.
How do you retain your best and brightest? We can help you to develop a workplace culture of engagement. It takes less time and effort than you might think, and will make a huge difference to your business.
Our 1-day workshop ‘Transform your Workplace with Coaching Moments’ is for busy managers, and will show you how you can connect with and motivate your workers in a structured 10-15 minute coaching session. Take your business to the next level by discovering how to engage people with their work, how to develop them to be more productive, and how to maximise their contribution to your company’s success.