Reduce turnover by showing employees you care!

?Employee retention continues to be a top priority of employers as we move into the 4th quarter of the year. Through June the U.S. Bureau of Labor Statistics reported that civilian workers compensation increased by 5.1% year over year. This means if a front-line retail employee quits a job where they were hired last year for $15, an employer would likely need to offer $15.75 to replace the employee. The replacement cost could be even higher at the managers level, a manger making $60k last year, based on wage inflation should expect to get $63k today. This is driving up operating expenses for many businesses and potentially resulting in a worst customer experience due to inexperienced employees replacing those with better knowledge of the business. As a consumer I have noticed many businesses with now hiring signs posted in the window have slow and less engaged service. I believe this is linked to the high level of turnover that these businesses have experienced, which is especially painful when it hits at the manager level.

So, what is driving the higher level of employee turnover? Donald Sull, Charles Sull and Ben Zweig (2022) have conducted research using Culture 500 and Glassdoor and found that a toxic culture is the #1 one reason that people are leaving. During my career I worked with over 600 Franchisee and found that business culture is the key to employee retention. Franchise owners that treated their employees fairly, created an environment where employees practiced civility and caring for one another, rewarded good behavior and drove accountability around poor behavior had low turnover. Franchise operators that lacked structure to their business, did not provide clear direction, failed to hold employees to high standards, rarely rewarded good performance and that did not foster a positive work environment habitually had high turnover. I did find that high pay sometimes would reduce the amount of turnover that I saw in a toxic work environment. In those cases, employees would stay, but would not demonstrate the same level of commitment to excellence that I saw in the better work environments ( #quietquitting ).

The best way to reduce turnover is for a manager or owner of a business to demonstrate authentic caring for their employees. In leading people over the years, I have consistently found that employees are extremely loyal to leaders that they feel are invested in their lives. Being invested in your employees’ lives can be as simple as being aware of what is going on in their personal life and making accommodations that help an employee through a tough personal situation. I remember one manager coming to me because he needed more flexibility in his schedule because both he and his wife worked, and they felt that it was important for one of them to be at their children’s sporting events. I was able to work with the manager to ensure that his schedule supported him being able to be involved with his kid's afterschool activities. This was important in two ways, one the employee saw value in working for a company that gave him the flexibility to be involved in his child’s activities, and secondly it role modeled the type of environment that I wanted the leader to create within his organization.

Showing you care can also be demonstrated by understanding why your employee works for you and doing what you can to support that purpose. If someone is working with you because they have aspiration of working their way up in the organization, you can show you care by delegating responsibilities to them and helping to grow their skill sets. If an employee is happy with their current role, but is looking for more responsibility, trusting the employee to be responsible for training new hires can give the employee a sense of purpose and self-worth. The key is to take the time to know what your employees want and helping them to achieve their goals.

High employee turnover is a sign that a work environment is not meeting employee needs. As a leader of employees, you play a key role in creating a culture that where people want to work. If you are seeing increased turnover, it is important that you learn why people are leaving. Exit interviews are a great source of fact finding. Former employees can help you to better understand the culture of your organization, and what steps you can take to improve retention. All turnover is not bad, but if the turnover you are experiencing is leading to higher operating cost, and lower employee productivity take steps today to show your employees that you care about them and that you are taking steps to improve their work environment.

References

Donald Sull, C. S., & Zweig, B. (2022, January 11). Toxic culture is driving the great resignation. MIT Sloan Management Review. Retrieved September 12, 2022, from https://sloanreview.mit.edu/article/toxic-culture-is-driving-the-great-resignation/

U.S. Bureau of Labor Statistics. (2022, July 29). Employment cost index summary - 2022 Q02 results. U.S. Bureau of Labor Statistics. Retrieved September 12, 2022, from https://www.bls.gov/news.release/eci.nr0.htm