The Ultimate Guide to Managing Employee Turnovers
Despite numerous incentives for employees, even top company performers come and go. According to a 2016 survey conducted by Deloitte Consulting, two-thirds of Millennials who are currently dominating the workplace wish to leave their companies by 2020.
This demographic is highly driven by their personal values, as 49 percent said they have turned down projects that go against their personal ethics, and 56 percent said they will not consider working for companies based on the organizations’ core values and conduct.
Employees come and go is a proven fact. But, there are ways on how to secure top talents, retain them for as long as you can, and reduce the number of employees who bid farewell.
Below is a complete guide on how to manage employee turnovers.
The High Costs of Goodbyes
First of all, when employees resign, the team’s productivity spirals down. Think of a team as a four-legged table such that when one leg is broken, the remaining three need to support the entire weight until a new leg is installed.
In many companies, the full weight of the resignation is felt by the employee’s ‘work buddy’ who needs to shoulder most of the workload that will be thrown into the ring. Sure, you can always spread out the tasks among the team members, but the added workload and extended hours often just cover the most important jobs while less significant deliverables are pushed back farther until they pile up.
“One CEO I spoke with had his five-year growth plan turn into a six-year plan because of delays due to employee turnover,” shared human resources consultant Tom Armour, who’s based in Toronto, Canada.
Employees who recently resigned are often required to give a month’s notice so the company can look for a suitable replacement. But, it doesn’t always happen that fast. Recruiters and interviewers must be paid to search for suitable candidates.
Finding the right applicant, training the replacement, and transitioning the newbie into an established team takes time, money, and effort. Moreover, despite the availability of hand-over documents, lost knowledge isn’t always recovered and developed skill sets are gone.
Why Companies and Employees Part Ways
The added workload can also increase the risks of resignation in other team members. Staffing firm, Robert Half, conducted a survey in 2014 that analyzed the top reasons employees quit. The study surveyed over 2,100 chief financial officers (CFOs) in the U.S. and almost 300 employees aged 18 years old and above.
Being overworked ranked fifth in the top reasons that can result in a resignation among the employees. Among the CFOs, being overworked ranked fourth. Inadequate salary and benefits ranked first in both groups. An extended period of overwork could lead to another resignation—doubling the rate lost productivity.
Employees who recently resigned are valuable sources of information. For some employees, salary isn’t always the driving force that pushes them towards the exit door. In the Robert Half survey, both employees and CFOs ranked insufficient benefits as the top reason that could make them resign. Perhaps the organization lacks a loyalty program or other forms of employee incentives that can keep talents happy and secured.
Team leaders, managers, and supervisors can learn valuable insights from a recently resigned team member. Resignations offer valuable opportunities for companies to do a health check and exit interviews shouldn’t be confined to paper-pushers in the HR departments.
How to Reduce Employee Turnovers and Keep Top Talents
JobStreet.com’s 2015 Top Companies Report included a list of companies most Filipinos aspires to work for. Filipino-owned San Miguel Corporation (SMC) topped the 2015 list, with Nestlé Philippines and Accenture in the Philippines in the second and third positions respectively.
The survey found that salary remains to be the top reason Filipinos want to work in these companies, however, money isn’t the only driving force. Company benefits such as health insurance, car and housing plans, performance-based bonuses, loyalty programs, and retirement tactics entice many fresh graduates and professionals to work with these brands. New graduates also look out for opportunities for learning and development, training, and offshore work.
More and more companies are starting to embrace new age thinking when it comes to Millennials. This demographic has a broad range of skill set that they want to continue developing in a business setting.
Three experts, LinkedIn co-founder, Reid Hoffman, entrepreneur, Ben Casnocha, and Wasabi Ventures co-founder, Chris Yeh created a technique that you can utilize when faced with a top talent who wants to resign called the “Right of First Conversation.”
In this method, the employee gets to talk to his or her manager first. If the main reason is the desire to explore other career options, the current manager can help the talent look for a suitable role within the organization so the company will not have to suffer from employee turnover.
This provides an open communication between managers and team members who wish to explore other opportunities that can be found internally. Trust between the managers and team members is built and can even be a form of mentoring that can shape future leaders.
Talents shouldn’t be fired for speaking clearly about their career goals and desire to look for ways on how to develop their other abilities. But, managers should always build on that trust and not overpromise all in the name of employee retention.
How to Spin Employee Turnovers into Opportunities
Very low to nonexistent employee turnovers can also increase the costs of loyalty programs that reward people for their number of years in service. Further, some employee turnovers are inevitable and some even needed to have a fresh batch of new talents that can bring innovation and insights.
Resignations can also provide a way to avoid making personal decisions, especially ones that involve a difficult employee. If the business needs to do some cost-cutting, employee turnovers can be a way to cut some cost in the workforce without making “the talk.”
A vacant seat offers management ways to make different decisions that can help improve productivity. For instance, if the former employee left because of a mismatched personality, try hiring an exact opposite and see how it will par with the team currently in place. A vacant seat is like a blank canvas with new possibilities.
All Is Well
Employee turnover is a part of operations and should be included in the organization’s business continuity plans. Employees, even the most loyal ones need to fly out of the nest at some point in the future, but loyalty doesn’t need to end when a resignation is final.
The age-old adage of not burning bridges should be an unspoken rule between employers and employees. Even if you don’t plan on working in the same industry, paths could cross once more, and it is always better to leave on a good note rather a messy trail.
Turn resignations into opportunities to keep building the relationships with ex-employees. After all, who knows when the tides will turn, and you end up needing their help in the distant future for a collaboration.