3 Ways to Turn Down Employee Turnover

3 Ways to Turn Down Employee Turnover

Written by: Retensa | Retansa.com

The word turnover means more than a number calculation. Losing good employees is one of biggest drains on a company’s bottom line, yet organizations consistently overlook or miscalculate what it truly costs.  A Cost of Turnover analysis that gets to the bottom of what really matters – what turnover costs, why it costs, and how to fix it — goes beyond simple multiplication and division. Through a better understanding of these 3 hidden factors, organizations can turn up the employee motivation and turn down the cost of employee separation.

The Need for Cost of Turnover Analysis

The impact of turnover reaches far, ranging from measurable, direct impact on the bottom line to indirect costs such as employee theft, reduced reputation, and loss of customers.  For organizations who want to improve profitability by putting an end to this costly issue, awareness of the problem is Step #1 in turning down turnover costs.

There are 3 ways companies typically handle Cost of Turnover:

  • Operate in denial or unawareness of it
  • Acknowledge that turnover exists but do not take action to predict or prevent it
  • Launch programs to address it without taking the time to diagnose the root causes. These organizations may unlock some talent management potential by guessing, but they have to dig deeper for real, sustainable results.

If a Cost of Turnover analysis offers such important benefits, why do most companies avoid the time and energy to understand it? And why do interventions fail?

Not All Cost of Turnover Analyses Are Equal

A true Cost of Turnover Analysis unearths the hidden factors that escalate into thousands, and sometimes tens of thousands, of dollars per person. It would also compare the cost of turnover by location, department and/or job function. At the same time, it takes into account the unique specifications of a company’s size, industry and business type. An experienced employee retention expert can detect the influences in play that confounding factors may conceal or blur. For this reason, not all Cost of Turnover calculators are equal.

Calculations are only as good as the analyst’s understanding of the subject. Cost of Turnover calculations fail for a few reasons. They often miscalculate by failing to take the most relevant industry-specific factors into account. Or, they may focus too heavily on cluttering inputs that do not truly impact the business. Lastly, the variables included may not go deep enough. Employees’ fear of consequences, even subconsciously, can often cover up the truth. The result? Much ado about nothing: novice calculations that yield weak insights incapable of framing any meaningful response.

The solution? Put down the pen and paper and devote time to listening and observation. Take the time to map the employee experience and how an individual joins, stays, and leaves. Then apply this understanding to determine which elements to include in your Cost of Turnover calculations. Here are 3 factors that a highly trained, acutely observant analyst will catch.

Hidden Factor #1: Messing Up the Mojo

A magical charm exists in high performance teams, especially those in creative fields such as arts and entertainment, media, and advertising. Losing a great employee derails that focus and can weaken the team’s ability to achieve results. In addition, turnover can distract employees or force them to pick up the slack in areas where they lack expertise. A comprehensive Cost of Turnover Analysis captures lost peer productivity, not just the loss of productivity from the individual performer.

Hidden Factor #2: Nurturing the Competition

When a highly trained worker leaves, you become a donor to another company by giving away high-potential human capital. Training, mentoring, and all the indirect costs of taking the time to develop talent within an organization go down the drain the minute an employee hits the road. There are better ways to invest than grooming the talent of the competition. Quantify the overlooked direct and indirect costs of their manager’s training, from onboarding to professional development, to really understand how much of the company’s investments are walking out the door. 

Hidden #3: Losing Credibility in the Sales Process

Start with reputational damage, and go a step deeper. For companies who prospect to institutional, multinational, or government entities, very often the sales process requires completion of a formal Request-for-Proposal (RFP) and bid. During this process, companies answer questions about the turnover rate of their staff, especially those in client-facing roles. Revealing statistics that put bidders at a disadvantage weakens the pitch and kills credibility – and their pipeline. Or new sales hires lack the experience to bring insights needed to close deals. Compare sales in high staff turnover versus low turnover areas to see the magnitude of impact.

Employee Retention Idea #46: Try It, You’ll Like It

As the world’s leading innovator of employee retention strategies, Retensa provides the tools to predict and prevent breakdowns in the Employee Life-Cycle. Our proprietary 151 variable Cost of Turnover calculation, delivered by experienced analysts, captures the costs that go undetected by the novice talent management consultant.

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NBA Player Carl Landry Demonstrates the Value of Persistence in Life and Work

NBA Player Carl Landry Demonstrates the Value of Persistence in Life and Work

Written by: Jon Sabes

When you meet Carl Landry, stand-out college basketball player and nine-year NBA player, you imagine that becoming a professional basketball star was a straight forward run for the 6-foot-nine-inch power forward. 

However, when you go deeper into Carl’s background, becoming a NBA professional was less than certain and little came easily to the 33-year-old from Milwaukee:

  • He was cut from his high school team as a freshman and averaged less than ten points a game when he did play as a senior.
  • He started his college career not at Purdue, but a junior college where it was not clear he would play.
  • When he finally got to Purdue, he tore his ACL in his knee his first year and reinjured it the next year.
  • While his family held a party for him the night of the NBA draft, he slept in the Philadelphia airport after missing a flight following a workout for the 76ers.
  • In the NBA playoffs, Carl had a tooth knocked out, but came back in the same game to make a game-winning blocked shot as the Rockets beat the Utah Jazz 94-92.

Landry, who I interviewed on my podcast, Innovating Life with Jon Sabes (www.jonsabes.com), is a remarkable example of the value of “persistence.” In a time where technology creates the image that anything is possible at the touch of a button, persistence is an under-appreciated trait. When I spoke with Carl, I clearly saw someone for whom success has only come through a force of will that made him a NBA player, but it also made him a better player every year he played. That’s the kind of personality that has produced greatness in business as well as sports.

Carl was, in fact, drafted that night he spent in the airport. The Seattle Supersonics chose him as the 31st overall pick and then traded him to the Houston Rockets where he rode the bench for much of the first half of the season. When All-Star teammate Yao Ming was injured, he stepped in and played a key role in the Rockets astonishing 22-game winning streak (the third longest streak in NBA history). And, that season, after sitting on the bench for 33 of the first 36 games, he was named to the All-Rookie second team.

Carl was the first in his family to go to college. “I told myself that this was my ticket out, so I did everything I possibly could to be the best person in school and also on the court,” he said.

His family life in Milwaukee showed him what he didn’t want to do. “Just being honest with you, seeing some my cousins, peers, they went to work for jobs paying six, seven dollars an hour or they didn’t go to work at all and then living off welfare. I didn’t want that.”

When he was first injured, he had to contemplate the end of a career before it even got started. “When you have an ACL tear, it’s over…no more basketball,” he told me. “I said, God, give me health again and I’ll do everything I can to leave it all out on the line and be a successful individual.”

On my podcast, Carl pointed out another interesting lesson he learned in the NBA: Not doing things just to fit in.

“Fitting in was easy,” he said. “Doing everything that everybody else does was easy. If I stood out in some type of way, I’m going to have different results. I’m going to have stand-out results.”

That’s called the “Law of Contrast” and it produces that exact effect of changing the outcomes that everyone else is experiencing.  Carl is smart, he recognized that differences make a difference, and doing whatever it takes is what is required to make real, meaningful differences.

Every off-season for the last 11 years, he has run a camp for kids in Milwaukee where he tells youth his story of hard work and persistence. “I always tell the kids to apply themselves and always be persistent,” he said. “If you dream, apply yourself and be persistent. With hard work, man, the sky’s the limit.”

When Carl says the sky’s the limit he means it.  He is smart to recognize that it’s important to dream big, because if we don’t – we may be selling ourselves short. “You have to dream bigger than your mind could ever imagine,” he said. “I wanted a nice house. I wanted a nice car. I said, and I got all of that. So, what do I do, do I stop now? Maybe I didn’t dream big enough.” That’s a big statement coming from a kid who grew up to be the first in his family to graduate college and go on to be not only a top NBA basketball start, but a good businessman, father and someone who gives back to the community.

I’m convinced that in whatever he takes on as a basketball player or in his post-hoops career, Carl Landry is not going to stop getting better at whatever he does, and in the process of doing so, make the world a better place.

GWG Holdings, Inc.
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GWG Holdings, Inc. (Nasdaq:GWGH) the parent company of GWG Life, is a financial services company committed to transforming the life insurance industry through disruptive and i ... Click for full bio