It is possible that many companies think early turnover is just “the cost of doing business.” My recent work with the U.S. Census Bureau makes clear that there are fewer new workers coming our way, so I think it is time that we get a lot smarter about who we hire and how we retain them. Here are four ideas that I promise will work because if you don’t address it now, turnover may just cost you your business.
From SHRM23 Las Vegas: Is It Pay?
The short answer is it depends on who you ask…but ultimately the answer is “no”.
Surveying the SHRM23 Crowd
Speaking to a crowd of 1,500 on why employees are really quitting their jobs, I first polled the audience on whether they believed exit surveys help them cut turnover. About 5% said “yes” while many in the dominant “no” group shouted out “employees don’t tell the truth”…which was the beginning of the real-life struggle to get clean data.
Let the Data Do the Heavy Lifting
Next we explored four popular “why employees quit” surveys and learned the same lesson. Pew Research surveyed actual employees who had quit[i] while SHRM surveyed HR managers[ii]…with both groups putting pay at the top. MIT looked to Revelio Labs which scrapes data electronically from LinkedIn, Glassdoor, and other employee input sources, and their conclusion was the opposite…putting toxic corporate culture at the top with pay all the way down to #16.[iii] Gallup named their top quit reason to be employee engagement and culture while saying just 14% of employees are quitting due to pay.[iv]
Survey Says It’s Toxic Culture, Not Pay
What to make of this conflicting data mess? First, asking employees why they quit isn’t the truest data source because as the audience majority said, “employees don’t tell the truth”. But as importantly, beware of labels that researchers use to group exit reasons together such as toxic corporate culture and employee engagement and culture.
What did MIT name as the actual quit reasons behind their #1 label of toxic corporate culture? (1) failure to promote diversity, equity, and inclusion, (2) workers feeling disrespected, and (3) unethical behavior.
And Gallup said employee engagement and culture was their sum-up title for (1) lack of respect, (2) advancement and development opportunities, and (3) unrealistic job expectations.
So let’s list these six #1 quit reasons together:
- Failure to promote diversity, equity, and inclusion
- Workers feeling disrespected
- Unethical behavior
- Lack of respect
- Advancement and development opportunities
- Unrealistic job expectations
Now let’s add to this data stew a few findings Gallup has told us many times in the past…that the common belief that companies have consistent, universal cultures is wrong because each supervisor develops her own culture, and also that first-line supervisors drive no less than 50% of turnover and 70% of engagement.
I studied under an industrial/organizational psychology professor during mid-career because I wanted invent a research-based solution to reduce employee turnover. My eyes got huge when Professor Murphy sent me academically-completed research papers on why employees leave…and the overwhelming reason was whether those employees trusted their immediate, first-line supervisors.
Proof if You Change the Culture, You Cut Turnover
As proof of this finding, I showed the audience a list of nine client corporations that had cut turnover 20% and more during “the great resignation” by (1) training first-line leaders to conduct Stay Interviews with each member of their teams, (2) building stay plans based on each Stay Interview outcome, (3) forecasting how long each employee would stay, and then (4) being held accountable for the resulting two metrics which are achieving retention goals and developing accurate retention forecasts.
Not coincidentally, these are the same metrics organizations apply to salespeople…making your goals and developing accurate forecasts. So CEOs instantly relate to this type of talk versus turnover percentages and exit survey results.
These examples of client results show the diversity of jobs they impact and therefore our solution’s universal opportunity to cut turnover across all industries:
- Mt. Sinai nurse turnover down 25%, in a building where large coolers held COVID bodies just a couple of years ago.
- Clayton Homes’ turnover down 28% while saving 1,200 jobs which they value at $5,000 each, resulting in total savings of $6MM…so far.
- Wayne Sanderson has cut turnover nearly in half, processing chickens for Chik Fil A.
- Waste Management has reduced turnover by 30% among workers who pick and sort trash.
- United Facilities has cut forklift driver turnover by 58%.
- And Covenant Health in New England has cut turnover by 31% across all healthcare jobs.
The common approach for all is that they direct every retention solution directly through their first-line supervisors, from the CEO on down.
It’s Not Pay, It’s the Culture of Your Direct Supervisors
Think of your managers and supervisors as your employee retention “portals”. When employees seek support regarding recognition, development, scheduling, stress and mental health issues, inclusion, pay, that they can’t work with their colleagues, or any other of the daily employee needs, their supervisor is their go-to source. Or should be.
Or said another way, one-size-fits-all programs are essentially worthless unless the boss is seen as being trustworthy by her team…and this includes pay.
Beware also that pay never works in a vacuum. If I offer you $1 more per year and you like your job, then you will say “no”…but if you dislike your job you are then more likely to say “yes” in order to abandon a supervisor or some other part of your job you dislike. Very few employees leave a job for pay alone.
You Can Cut Turnover by 20% or More, No Matter Your Industry
There is an established solution for employee turnover…start here to learn our comprehensive turnover solution, and watch the 2-minute video to open your eyes to fresh thinking for cutting turnover 20% and more. Then schedule a conversation with me at DFinnegan@C-SuiteAnalytics.com.
Missed my mega session at SHRM23? SHRM.org published a recap here: https://www.shrm.org/ResourcesAndTools/hr-topics/compensation/Pages/employee-turnover-retention-problems-is-pay-the-problem.aspx
And you can access a pdf of my presentation deck here: https://c-suiteanalytics.com/wp-content/uploads/2023/06/SHRM23-IsItPay-Finnegan-FINAL-20230611-N1.pdf
Want me to present my mega session to your top team virtually? Just ask! Email me at: DFinnegan@C-SuiteAnalytics.com and we’ll find a time that works for you and your team.
[i] https://www.pewresearch.org/short-reads/2022/03/09/majority-of-workers-who-quit-a-job-in-2021-cite-low-pay-no-opportunities-for-advancement-feeling-disrespected/
[ii] https://www.shrm.org/hr-today/news/hr-news/pages/report-hr-pros-rank-top-reasons-for-turnover.aspx#:~:text=As%20the%20top%20reason%20for,budget%20for%20compensation%20was%20adequate.
[iii] https://sloanreview.mit.edu/article/toxic-culture-is-driving-the-great-resignation/
[iv] From Gallup’s new book Culture Shock, by Clifton and Harter, published by Gallup Press, 2023, page 68.
Related Posts
