In times of rising costs and low unemployment, staff turnover is especially challenging for any organisation. Recent research is suggesting 81% of businesses are having difficulty replacing staff. In addition, other research shows that replacing an entry level employee is 30-50% of their annual salary, a mid-level employee 150% and a high-level employee, executive or specialist 400% of their annual salary. These percentages not only include hiring costs, but also loss of productivity due to time taken to become proficient in the new employee\u2019s job, learning new systems, building collaborative relationships, together with costs resulting from the impact of high turnover on the morale of the remaining employees.<\/p>\n\n\n\n
Reducing employee turnover can be addressed under three general categories: the employees\u2019 line managers; organisational culture and employees themselves.<\/p>\n\n\n\n
1. The Line Manager<\/strong>\u00a0<\/p>\n\n\n\n Gallup research indicates 70% of employees\u2019 motivation is affected by their relationship with their immediate manager. That relationship is damaged when managers:<\/p>\n\n\n\n In other words, when managers don\u2019t have integrity and lack empathy, their relationships with their direct reports suffer and employee motivation dissipates.<\/p>\n\n\n\n 2. The Organisation\u2019s Culture<\/strong><\/p>\n\n\n\n A second cluster of reasons employees resign is due to internal organisational issues, eg:<\/p>\n\n\n\n 3. The Employees Themselves<\/strong><\/p>\n\n\n\n While some employees will remain with an organisation despite the types of issues in 1 and 2, many who have strong values, are ambitious or have positive self-esteem will be on the lookout for a suitable job elsewhere. That\u2019s what I have done and I know several capable people who have done the same.<\/p>\n\n\n\n However, there are also employees who resign purely for personal reasons such as: to pursue a new career direction; undertake full time study; enjoy a change of lifestyle (eg. travel overseas or around Australia, have better work\/life balance); to relocate because of their partner\u2019s work; or for health reasons. For this latter group there is really not much an employer can do to encourage them to remain.<\/p>\n\n\n\n Conclusion<\/strong><\/p>\n\n\n\n It\u2019s interesting, as well as concerning, that several organisations continue to haemorrhage employees without addressing the core reasons people resign. Many managers and businesses are content to blame employees themselves \u2013 accusing them of being unreliable, not interested or disloyal. Travis Bradberry cites research from the University of California that found motivated employees were 31% more productive, had 37% higher sales, and were three times more creative than demotivated employees. Bradberry also found they were also 87% less likely to resign, according to a Corporate Leadership Council Study of more than 50,000 people.<\/p>\n\n\n\n Certainly, as I have explained, some employees will still resign. However, as the research shows, employees who are motivated and satisfied with their jobs are far less likely to do so. It amazes me that according to research only 34% of organisations always take the effort to find out why their people are leaving. The only way to really know is to ask them. And that best happens through developing a respectful and confidential exit interview system and incorporating the insights gained into the organisation\u2019s employment systems, organisational policies and management practices. Yet, according to research, less than half of all organisations hold face to face exit interviews, let alone make the necessary changes in light of the insights revealed. (For further information see my article, \u2018Exit Interviews: When It\u2019s Time to Say Goodbye\u2019 on this site.)<\/p>\n\n\n\n\n
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