How to Reduce Employee Turnover
How to Reduce Employee Turnover
By: Mike Myatt
Chief Strategy Officer, N2growth
Few things in business are as costly and disruptive as unknowingly having the proverbial revolving door for employees from which to exit. While there are many secondary and tertiary items that can influence an employee’s decision to leave, in this week’s column I’ll address the one single factor which constitutes the overarching reason that drives a person’s decision to leave their employer.
Let me begin by stating that no company in the world has a 100 percent retention factor if measured over any meaningful length of time. It is also particularly true that today’s global business climate creates a “grass is greener” mindset for many individuals given the plethora of opportunities in the marketplace at any given point in time. The two aforementioned disclaimers aside, there are definitely companies that have created excellent work environments leading to superior employee satisfaction and retention. Organizations that display the healthy, dynamic, and positive culture that fosters a motivated and engaged workforce all have one thing in common…great leadership.
There is an old saying that goes; “Employees don’t quit working for companies, they quit working for their bosses.” Regardless of tenure, position, title, etc., employees who voluntarily leave generally do so out of some type of perceived disconnect with leadership. Furthermore, while the accuracy of exit interviews are somewhat debatable, they nonetheless support the conclusion drawn in the previous sentence. The following list contains just five representative samples of the differences between solid company leadership and poor leadership as it relates to employee turnover.
- Hiring Methodology: Great leadership teams use a values based hiring methodology. They hire slowly, carefully, and only to fill a defined need with a specific skill set. Companies with challenged leadership hire quickly, often based solely on how affordably they can fill a position, and many times in absence of a defined need.
- Leadership Continuity: Great companies have a clear vision, mission, and strategy, which are evangelized by a cohesive leadership team. A crisply articulated vision, and continuity of leadership creates an engaged workforce that understands the business model and key objectives of the enterprise. Companies that have a fractured leadership team lose the confidence of line and staff. Employees that don’t understand what they’re playing for are very difficult to motivate and as a result are often disengaged and non-productive.
- A Planned Transition: Outstanding leadership teams set employees up for success and not for failure. They have an established onboarding process which puts forth an initial roadmap for a successful transition by clearly defining key performance indicators, business objectives, and other key metrics. Well honed leadership teams immediately assign an in house mentor to new hires to help insure a successful acclimation. Unsophisticated leadership teams usually have a sink or swim mentality with regard to new hires and have substantial voids in training and management processes in the early days of a new hire. Poor leadership teams have a lack of continuity in their training and development which breeds discontentment and dissatisfaction.
- Compensation: Great leadership teams understand the value of tier-one talent, and are not afraid to pay-up in order to attract it and retain it. They create a multi-tiered compensation plan that rewards employees at the top of industry scale when performance objectives are met or exceeded. Moreover they understand the value of non-compensatory recognition and apply it generously and judiciously. Companies with poor leadership often trip over dollars to pick-up pennies when it comes to compensation. Their compensation plans lack sophistication, creativity, and are engineered by default and not be design. People will often cite non-competitive compensation as an issue for leaving a company, but what they are really stating is that the company has an unsophisticated leadership team which is out of touch with both the market, and the needs of its employees.
- Professional Development: Solid leadership teams challenge their employees by offering them a clear path toward personal and professional growth. Great companies create a career path that offers the successful employee the option of matriculating throughout the company based upon achievements, needs, and qualifications. Great leadership teams understand that in order to create a thriving and sustainable enterprise that a key priority is to develop talent to their greatest potential, and ultimately to create other leaders. Poor leadership teams don’t see the value in training, mentoring, coaching, and other forms of professional development. Their workforces are stagnant and not competitive, which places them a not only a competitive disadvantage, but also at risk for long-term sustainability.
We offer an initial free assessment for owners of media properties. Just click on the property type, complete the CONFIDENTIAL FORM to get started. We'll call you back within 24 hours to review.
Businesses for Sale
View our list of businesses that are currently for sale.
Free Newspaper or Global Events, Technology & Digital Media News
Stay abreast of the latest trends in the M&A industry. Read interesting case studies. Track deals throughout the country. Pick up hints from experts and much more.