You Win Some, You Lose Some.

It’s Polygraph time! Here’s the question. How do “you” personally view turnover inside your current organization or, on your team? Should it matter? Now don’t be so quick to respond! We all know that the programmed auto-response is going to be “Well of course it does!” But when the tire hits the road, how are companies viewing this? Has turnover become nothing more than an acceptable line item in the books - a fixed expense? Given new market realities, has the prevailing attitude become that it is what it is; and simply factor it in and plan for it moving forward?

As of late I’ve been hearing more and more people express how they just “don’t have the time” regardless of the subject matter, which when it comes to turnover, I must say it puzzles me. With your bottom quartile, it can certainly be argued that turnover is a necessity. But, would you say the same about the top quartile of performers inside your organization? That question is what increasingly has our attention.

I think it’s fair to say that if the corporate mothership isn’t pushing to bring your turnover numbers down, then there’s a good chance that it’s not going to garner much of your attention. After all, you’ve got enough on your plate, why add more if you don’t have to? But I have to ask… is it like a sink full of dirty dishes that the teenager walks by and ignores even though they know they need to be done?

Some would argue this is where employee engagement and/or company culture factors in. But I’ll get to that a little later on with some very interesting thoughts on the subject.

First, let’s take a look at what turnover actually costs you. First and foremost – Time. There’s nothing quite as frustrating as taking three steps forward and two steps back. Repeating a task that you completed say 12 to 24 months ago? You don’t have that kind of time to waste and you certainly don’t have the time to do it all over again. Think about it, if you didn’t have to rinse and repeat, what could you do with all that extra time on your hands?

I equate it to cleaning the house. We’ve all been there. You finally get it spotless and then your sister stops by with the kids and they turn the place upside down. Or let’s say you take your car to get it washed and waxed, come home, park it in the driveway and then two hours later it rains. The feeling of frustration overwhelms you because you feel that you just wasted your time. Checked something off the “to do” list and finally felt that you were getting ahead of the game. Guess again. 

What about Speed? If you’re spending your time, in essence… recreating the wheel, then your speed-to-market is greatly reduced, which is something in this day and age no company can afford.

Another cost is – Cost. Aside from the obvious expense of replenishing the talent, what if you could get employees to stay say 10% or even 20% longer, how much would that save the company?

As for the employee, I have to ask… How much of where you do what you do is truly important? Another mission statement, different vision, new team, new culture, new boss, different dynamics etc. You’ve altered the trajectory of your life just a bit, maybe even more, to accommodate this new opportunity and you bought into what they were selling – OH WAIT… that was the last company that you worked for. – My bad.

My point is, according to an article in Information Week "Today, tech (as an example) have the highest employee turnover of any business sector, with a staggering churn rate of 13.2%. Even if companies do manage to attract and onboard a great candidate, chances are they won’t stick around for long. Many will argue that’s the nature of the beast. But is it and should it be? There are some factors that are still in our control, but do we make the efforts to apply these optimally?

Turnover is an issue found in every tech business, no matter the size. While Google is often hyped for its comprehensive benefits package and quirky offices, the average length of service for Google employees is just 1.1 years. Amazon’s tech workers tend to stay for only one year, and Apple fares little better, with a typical tenure of 24 months."

So, how does this reality play out in the mindset of Executives, Hiring Leaders, HR and TA professionals? If companies are more or less renting talent for 24 months or less, how much is the company and its leadership subconsciously willing to invest in the individual? The knee-jerk response of course, is “we always do!” But do the actions back up the words?

The fact is, the majority of employees say that the three main reasons they leave, is career growth, money and the need for their employer to value their contribution. The problem for employer would appear to be, that the employee is the one setting the timeline for their expectations to be met.

But how much time does it take to show someone that you value their contribution, that what they do matters – that they matter? The issue is that too many companies think that after they hire a great candidate, that their work is done, but that’s far from being the case. Allow me to offer you a real-life scenario, the context of a conversation that I had recently with an elite professional currently working for a diversified conglomerate with global reach.

See if you can you relate to the following, and in what ways? This individual is recognized as a high potential and yet, no one within the talent organization has taken the opportunity to meet this leader face to face in a 5-year period. This begs the question: Should it fall upon the talent organization to know this leader? Regardless of your response, consider that the point about the talent organization was significant enough to be broached in the conversation. So, I have to ask: What does this say about the role of the talent organization in the broader company? Does this impact long-term turnover? Should it matter? You be the judge. I would truly love to hear what you think in the comments below.

As I mentioned in last week’s article, professional fulfillment is the sole reason why any potential candidate that I speak to will even consider a new opportunity. Let me say that again… Professional fulfillment is the SOLE REASON why any potential candidate that I speak to will even consider a new opportunity. And just to refresh your memory, my small sampling consists of 35,000 interviews over a period of 28 years.

There’s another point that I think is necessary to touch on. I stated above that tech has a churn rate of 13.2%, and that after no more than 24 months, even for some of the most “attractive” companies in the space, those who know they are in high demand have moved on to their next gig. For a moment, shift your focus to the 86.8% of tech employees who are still around after 24 months. While companies center their attention around trying to replenish the 13.2%, the 86.8% are still experiencing the same pain points. Let’s be honest for a minute, if the cream at the top, who doesn’t even have to look for a job, isn’t feeling the love, then I think we can be fairly certain that the 86.8% isn’t either. This is why perhaps a reallocation of resources should be taken into consideration.

According to Harvard Business Review, “companies spend over $720 million each year on employee engagement (company culture), and that’s projected to rise to over $1.5 billion.” However, you have to ask yourself after reviewing these numbers if the resources and money invested is truly money well spent?

Although tech talent didn’t cite company culture as one of the main reasons for them leaving an organization, you’ll note that it isn’t necessarily making them stick around either. I think that Susan LaMotte, a former HR Leader at a Fortune 500 company was right on-point when she said… “employee engagement models are centered around the work experience and not on the employees.” I guess free meals and snacks, foosball tables, onsite gyms and nap pods obviously only get you so far. Don’t get me wrong, I realize in this day and age they are the superficial eye-candy that companies present in order to keep up with the Joneses, but I think at times companies place more significance on these cultural features than the true meaningful value that they bring. The bottom line is that when resources are focused on the wrong initiatives, your desired results won’t be achieved, and I think we all can agree that retaining the talent that you worked so diligently to obtain, should be the priority.

Do all of these stats apply across the board to every company? Of course not; but think about the resources behind the companies that I’ve mentioned. Should it be assumed that if companies of their stature are having issues then chances are other companies are as well? Or, does their size and brand work against them, providing a feeding ground for other tech companies to source talent, thus skewing the numbers? Hard to say, however, it should serve as a wake-up call for Hiring Leaders within your organization and cause them to pause for a little self-reflection.

There are however, one of two ways to alleviate these issues. One is thru the vetting process of both the hiring leader as well as the candidate from the onset. Gaining a true understanding of what’s at play, expectations, team dynamics and so on before the search for talent begins. This allows for the correct story to be told, to present what truly matters to both parties so there are no surprises or the potential for disappointment. It’s an exhaustive process to dig deep and get meaningful answers, but it has proven to pay immense dividends in the end, and I have the proof to back it up.

Redmond candidates score in the 95% percentile range when it comes to cultural fit and are often promoted within the first 18 months. The result: higher long-term “industry leading” retention rates.

Second, is finding managers or team leaders with high EQ, who possess the intangibles, who know how to make the contributions made by the members of their team be valued. To not be threatened by the elite talent around them but to elevate them to accomplishing something that matters. And to authentically care. 

We’re not talking about another quality management program that you can send your existing managers through in order to hone their skills. These characteristics have to be authentic and in their DNA. You either have it or you don’t. They are an integral part of the psyche that contributes to the fulfillment of an employee. In the case of the companies that I mentioned, it would appear that their staff doesn’t quite know how to identify and source them. That may be the same with your company as well. But we do.

I guess the bottom line when it comes to turnover is that it shouldn’t simply be an acceptable line item – there’s just too many other important things at stake, and the trickle-down effects are realistically too significant to ignore.

When you look at the big picture, it would appear that foosball tables and free snacks can be found at virtually any company, but the one-on-one, the value placed on appreciation, individual contribution and pursuit of professional fulfillment is obviously something that talented professionals are continuously looking for, and unfortunately it’s not so common place. The problem for most companies is that it’s not something that you can just throw money at, it requires the human element to come into play, because it’s obvious that the professionals that we are referencing are not looking to simply take a step up on the corporate ladder, they are looking to find a home where they can make a difference – and be valued for it.

About Steve Diedrick...

Steve is the founder of Redmond, a global executive search firm whose clients include world renowned brands and start-ups that are shaping tomorrow's world. As a highly respected authority and pioneer in the field of human capital with close to three decades in the space, his progressive ideas on search-excellence reflect a profound understanding/passion for the global economy and the ever-evolving mindset of the unique talent that propels companies forward. He has personally reached out to more than 100,000 professionals and interviewed over 35,000 potential candidates throughout his career. His personal drive, perspective, discipline and focus is a culmination of his life experience living abroad and the 27 years spent mastering the Martial Art of Qi Gong. His Mantra: There is nothing like direct experience that takes you from knowledge - to knowing.

Email me at: [email protected] or Text me at: 947.222.9200 and let's discuss how Redmond can help you.

? Redmond Research, Inc. 2020