I’ve never been a smoker but have been close to people who’ve labored through the quitting process, over and over and over. So changing jobs is 50% more stressful than that?

So let’s say your company’s annual turnover is that same number, 50%, or half that at 25%. What does this new information tell us about how badly your employees want out? How much they disdain working for your company? What could be SO bad that they are willing to drag themselves through half of the same stress level as if they were getting divorced? Or the identical amount of stress from the death of a close friend?

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Further Reading: How Employee Turnover Is Like Losing a Marriage

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The Data Behind the Data on the Stress of Quitting

This study was published in The Atlantic which brings a pristine reputation for data quality. The study was conducted on the Holmes-Raye Life Stress Inventory[ii] which compares life’s common stress events, scoring the top life event which is death of a spouse at 100, and then compares the remaining events to this number. The remaining top five stress events after spouse death are divorce at 73, marital separation from mate at 65, and then detention in jail or another institution along with death of a close family member are tied at 63. 

But we also know that quit stress levels differ among individuals. One study focused on technology workers tells us that just 30% of those who indicated that they would quit within a year actually did quit[iii]…which is why I never quote “January studies” that say a certain percentage of workers intend to quit this year. The more relevant data is how many actually do quit later.

That same study indicated that while many who said they would quit did not quit, that about a third of them had risk-averse personalities that make it even harder for them to quit.

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Further Reading: The Blatant Unfairness of Retaining Poor Supervisors

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So How Do You Prevent Employees from Quitting?

This weekly piece has been packed with employee retention ideas…so given the space available, let me offer the top four:

Sounds easy I know…but there are many obstacles to make that above happen in any organization. Our clients cut turnover by an average of 34% across all industries, so we’ve conquered every challenge that’s included in these top four approaches.

Email me to learn more at DFinnegan@C-SuiteAnalytics.com.

[i] https://www.theatlantic.com/ideas/archive/2025/01/job-hunt-quest-meaning/681299/

[ii] https://www.stress.org/wp-content/uploads/2024/02/Holmes-Rahe-Stress-inventory.pdf

[iii]https://dl.acm.org/doi/abs/10.1145/2843824.2843827?casa_token=YGHnXTTuCXkAAAAA:PrOxMtBqHJXllQrqWsZx5R4a997EWQ3-PQOgu-31C1oPQ3__s2NqS_vSKB4fRQpvwPd_qK-rgUWf

The post How Bad Does It Have to be for Someone to Quit Your Company? appeared first on C-Suite Analytics.

Unfortunately, today’s engagement still remains low. I vowed then to tell you how to improve employee engagement moving forward to overcome Gallup’s ongoing reporting that that just about one-third of our U.S. employees are engaged and that engagement has stayed essentially the same for years and years, long before the pandemic, and still to this day.

Why Hasn’t Employee Engagement Improved?

Let’s start with why most engagement strategies fail:

1) Reliance on employee surveys. A recent article in Fast Company declared employees are sick of surveys.[i] Why? Today’s employees are concerned about privacy and lack of trust in their organizations and managers that their answers will be heard. Surveys provide data but not solutions, and few organizations get the solutions right.

2) Using external benchmarks to judge internal data. Most surveys provide external benchmarks to compare results to. External benchmarks are momentum killers because most organizations are happy to be in the middle of the pack. And benchmarks which are so valuable in other areas of organizations are downers here because the easy cop-out is to say if other companies can’t fix this, we can’t fix it either. For most executives and many HR professionals, their reaction to their “average” engagement score compared to benchmarks is the same as their reaction to rush-hour traffic, something we cannot change and therefore we must work around. “The benchmark proves we can’t do better.”

Let’s pause here for a moment. Can you imagine your CEO thinking it is OK to be average in sales or service? Thinking that if competitors can’t do these things better then we can’t do them better either? This tells you the true state of engagement today, and why it hasn’t changed in twenty years.

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Further Reading: Why Hasn’t Engagement Improved in 24 Years?

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Can Engagement Scores Really Be Raised?

Absolutely! We have dozens of clients who not only improved their employee engagement and improved their employee retention by 20% or more, they did it during the worst of the pandemic’s trials. First, educate your top team that engagement is more than a score. A few years ago I published a paper on employee engagement’s correlations to productivity and profitability that is still relevant today and may be a helpful place to start.  

The time has come for CFOs to see employee retention and engagement as areas of both high cost and high opportunity for increased revenue. If your management meetings include CFOs reporting on essential operations performance against metrics while HR reports on engagement and retention, ask your CFO to report all of the data including engagement and retention. Otherwise, engagement and retention are seen as second-class metrics, less important than the operations metrics for which they might have the greatest influence. What influences operations performance more than the people who do the jobs there?

Second, share this Gallup study with your executive team regarding how much each individual leader impacts her team’s engagement.

Start by telling them the statement at the top is extreme, that Gallup researchers likely debated about whether to ask a question that included terms like “strongest personal relationships” when discussing employees’ bosses. But they did. And the outcome on a scale of 1 to 5 with 5 being high is 65% of the engaged employees…the ones we most need to keep…scored their manager relationships a 3 or above. And for the employees who are actively disengaged…the saboteurs…a full 92% scored their manager relationships a 1 or a 2.

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Further Reading: Yes or No: Do Engagement Surveys Cut Turnover?

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Nothing Improves Employee Engagement more than Stay Interviews

The you-can’t-miss-it conclusion is clear. Solving employee engagement must be done on a boss-employee level, one-on-one, and not with one-size-fits-all programs. The joke line here is no one stays longer or works harder for pet insurance.

One easy way to think about improving employee engagement…and for sure employee retention…is to ask what do your employees talk about over dinner. When someone asks, “How was your day, dear?”, employees focus on three topics…bosses, colleagues, and duties. There are zero one-size-fits-all programs that address these subjects because each person’s circumstances are unique.

In my book titled HR’s Greatest Challenge, I presented 25 studies proving the #1 reason employees stay/leave or engage/disengage is how much they trust their boss. This means every post-survey “solution” you implement matters less than bosses building trust. So yoga classes, company clocks, events with food…put your own list here…all matter not just less but far less than employees trusting their bosses.

Now it is easy to see why the U.S. spends $1.53 billion each year to improve engagement but engagement has not improved, right?

So if “boss trust” is the driving force for retention, how does each boss build trust? The obvious answer then becomes by making each employee’s day better…and not worse. Stay Interviews are a major part of the solution. The concept is simple but smart, that if employee turnover is based on how much employees trust their boss, then those bosses need an interactive way to build trust. And that interactive way must be based on topics each manager can control. So our five questions, the SI 5 as we call them, must address day-to-day issues that a first-line manager can change.

Our research tells us these are the right questions to ask…to learn what your employees think about during those first two hours after work and what they talk about over dinner. Nearly all day-to-day good things/bad things that are within their manager’s control.

The real proof is our client managers ask these questions, then listen, take notes, and probe to learn more by converting five questions to twenty or more. Then they build individualized stay plans for each employee. And their overall company turnover decreases by twenty percent or more.

Let’s have one more pause moment here. Does any metric across your entire company matter more than employee engagement? Or employee retention? Unless you are creating revenue entirely without employees, the answer is no.

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.

[i] https://www.fastcompany.com/91191527/employees-are-sick-of-surveys-heres-an-ultimate-guide-for-how-to-fix-them

The post Why Employee Surveys Fail to Truly Boost Engagement appeared first on C-Suite Analytics.

Two Bad Examples of Ducking Turnover

Recently I’ve seen two examples of organizations essentially avoiding fixing turnover by saying that increased turnover is unavoidable and then proposing work-around plans that are not proven. In fact these examples are from entire industries saying there is no fix for turnover.

The first “do not do” approach comes from a lead article in the Supply Chain Management Review, with the title Why Chief Supply Chain Officers Should Embrace Employee Turnover.[i] The author represents Gartner, a national-leading consulting firm, who cites their own data that turnover is likely to increase in the next five years. She goes on to say that “turnover is inevitable and it’s better to accept this fact, embrace it and turn it to your advantage.” Her advantage methods include conducting career counseling for opportunities both inside and outside of the organization, and then she cites that too often companies risk retaining disengaged employees with their overall efforts to retain their entire teams.

My gut reaction is you are coaching your productive employees to leave your organization and how will you replace them given our fast-increasing workforce challenges. As to her second idea, my suggestion is you should be coaching your disengaged employees and then take steps to fire them if necessary.

The second “do not do” approach comes from a keynote speaker at a national nursing conference I attended in April. Her pitch to the audience of nurse leaders was that nurse turnover is inevitable so find new ideas to work-around it. Coincidentally, this is a keynote speaker who has quoted my work extensively in her books, so this was completely counter-intuitive to those references. And, if she had attended the exceptional presentation at the same conference by Linda M. Valentino DNP, RN, NEA-BC, Stay Interviews & Human Centered Leadership: A Winning RN Retention Duo, she would have learned that Mt. Sinai West didn’t work-around nurse turnover, they solved for it and cut it by 43%.

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Further Viewing: Mount Sinai West’s Linda Valentino & Stay Interviews for Nurse Retention

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Is High Turnover Inevitable?

These things are true:

• Turnover is generally higher than we would want
• Our workforce shortage will get worse, not better
• Therefore the easy conclusion is turnover will get worse as well

If you were the above-cited author or the keynote speaker, you obviously believe that turnover cannot be fixed. But it’s not true that there is no solution to reduce employee turnover.

Do This! An Example of Cutting Turnover Versus Working Around It

When speaking at the SHRM annual conference in Chicago last month, a gentleman asked from the back of the room whether the retention tactics I described can work with non-profits. This is an insightful question because those who work in non-profits are more tied to their organization’s mission than their pay which is usually less than for a similar job in a for-profit company.

In that same room was Cliff Reyle, an executive with Youth Villages which has a total of 4,000 employees who provide emotional health services to young people who need them. Youth Villages is a client of ours and we are working to improve retention among their live-in residential counselors, the toughest group to retain. So in a room with about 600 folks I turned to Cliff to ask how much turnover had come down, to which Cliff replied “35 percent”…against an original goal to reduce turnover by 20 percent.

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Further Reading: Message at SHRM24: Stay Interviews Require Accountability

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In addition to reducing their turnover this much, Cliff told me how they are performing on their new-hire goal, as so often reducing new-hire turnover improves retention for all jobs over time. With a goal to retain 80 percent of new hires for their first 90 days, new-hire retention has improved to the following:

• 94% 90-day retention
• 88% 6-month retention
• 75% one-year retention

I would add that few who are reading this have a job that is as difficult to solve retention for as live-in residential counselors for challenged youth. But either way, Cliff and his team didn’t surrender to an inevitable fate to work-around, they took charge and did something about it.

You CAN Cut Employee Turnover

Those who read this column regularly know what comes next. That our research-based solution does indeed cut employee turnover…and it involves (1) converting turnover to dollars, (2) establishing retention goals, (3) training leaders to conduct Stay Interviews so they can build 1-1 stay plans with each member of their teams, (4) asking those leaders to also forecast how long each employee will stay, and (5) holding those leaders accountable to their goals and their forecasts.

Our method is based on research versus being whimsical or a combination of “best practices”. Yes, there is work and a dedicated effort to making these changes within your organization, but the results are significant and sustainable compared to a hands-in-the-air surrender with no proven solution or value.

Please email me if you’d like to learn more at dfinnegan@c-suiteanalytics.com.

Master Training: Employee Retention Intensive for HR Leaders

Based on Dick Finnegan’s ground-breaking work with Stay Interviews and Finnegan’s Arrow, our expert facilitators will equip you with all the tools you need to refine and implement your retention strategies to build a thriving, engaged workplace culture. Secure your spot today!

[i] https://www.scmr.com/article/why-chief-supply-chain-officers-embrace-employee-turnover?utm_source=Newsletter&utm_medium=Email&utm_campaign=TWISC&oly_enc_id=3458C7955823G5X

The post Don’t Do This! Bad Examples of Waiving the White Flag on Turnover appeared first on C-Suite Analytics.

More on nursing homes in a minute…but let’s first consider if this same command rippled through all healthcare. What if all hospitals, clinics, urgent care, dialysis centers, and more had to report their cost of turnover in their financials by applying an agreed-up dollar figure to their data. Then board members, and even the public, could see the dollar cost of turnover on an organization’s financial reports and use it to assess and set concrete goals for improvement.

The Dollar Cost of Turnover is Rarely Reported

How important is this? Many finance professionals in publicly traded companies start their days by opening their computers to the standard run of finance reports, looking for ways to save money or generate more revenue…all while millions of dollars are going out the door due to turnover. Why? Because dollars associated with turnover are not reported, not budgeted, not visible in any financial reports anywhere. Not to the boards of directors, not to Wall Street, not to current shareholders nor to potential buyers of your stock.

The same is true for small businesses, privately-held businesses, and non-profits. Seriously, pause for just a moment. How can any chief financial officer say her standard financial reporting presents a total picture of her organization’s financial performance if it doesn’t account for the dollar cost of turnover?

The True Dollar Cost of Turnover is Often Shocking

Finance and accounting pros are in a constant search for quarters in the couch compared to the millions in dollars in cost of turnover often overlooked or simply not accounted for.

Several years ago, I worked with an aerospace company that made rockets…and invited the CFO to participate in a turnover cost study. We ultimately agreed the cost of losing an engineer was $121,450. We talked after the meeting and I suggested his company’s total cost of turnover was likely a top-5 cost, competing with the costs of facilities, materials, and people. He called the next day and said he couldn’t sleep, had gone to work early to extrapolate some numbers…and determined turnover was his second-highest cost. How is that for a reality check!

Do you know your dollar cost of turnover?
Use our free Turnover Calculator to determine the
specific financial impact of turnover for your organization.

Turnover Data Incorporated Into Nursing Home Reporting

But let’s return to this great service our government is providing us by reporting nursing home staffing and turnover statistics. Go to https://www.medicare.gov/care-compare/?providerType=NursingHome and then follow the prompts to enter the name of any local nursing home to reach this incredible information as you imagine that you are trying to find the best nursing home for a loved one. The first data presents overall staffing rating on a five-point scale, and then each of the following data points compared to the national average:

• Total number of nurse staff hours per resident per day
• Resident nurse hours per resident per day
• LPN/LVN hours per resident per day
• Nurse aid hours per resident per day
• Total number of nurse staff hours per resident per day on the weekend
• Physical therapist staff hours per resident per day
• Registered nurse hours per resident per day on the weekend

And then you will find specific data relative to turnover:

• Total nursing staff turnover
• Registered nurse turnover
• Number of administrators who have left the nursing home

This same report contains the following makes-sense quote that contains a clue as to these data’s importance:

CMS has explored the relationship between staff turnover and quality of care and a preliminary analysis indicates that as the average staff turnover decreases, the overall star ratings for facilities increases, suggesting that lower turnover is associated with higher overall quality. 

Turnover Data Impacts Ratings AND Revenue

The star ratings mentioned here refer to each nursing home’s being assigned one to five stars based on metrics related to health inspections, staffing, and quality measures. Each star rating computes to dollars as these ratings are used by regulators, consumer, practitioners, insurers, lenders, and investors, as well as some designated Medicare payments.[ii]

So who is taking the lead to initiate reporting and financial accountability for each organization’s employee turnover? Our U.S. government is. Let’s see if other healthcare organizations will be next up to repair the gaping hole of not reporting turnover’s costs.

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Want to improve your retention but not sure where to start or how to convince your executives of the importance? Write to me DFinnegan@C-SuiteAnalytics.com or connect with me to schedule a FREE one-on-one consultation.

[i] https://www.cms.gov/newsroom/press-releases/advance-information-quality-care-cms-makes-nursing-home-staffing-data-available

[ii] https://thegreenfields.org/growing-importance-nursing-home-5-star-ratings-impacted-survey-findings/

The post Nursing Home Employee Turnover Data Transparently Reported appeared first on C-Suite Analytics.

Is Temporary Help Even Still a “Thing” During “The Great Resignation”?

One must pause to ask who wants to be a temporary worker in today’s economy when high pay and good benefits abound? That answer is, “many.” Many workers, now more than ever, value their independence to such a level that retaining them…and helping them reduce their absences so they don’t fire themselves…is a top-flight challenge.

“The Great Resignation” is About More than Pay

The Wall Street Journal reported on an Upwork study telling us more about freelance workers.[i] That group is rapidly expanding with the carrots being more money, flexible hours, and control of the type and amount of work they perform.

What are the greatest motivators? Eighty percent said control over schedule while 73% indicated location flexibility.

Initially C-Suite Analytics’ work with United Facilities covered three locations in three different areas of the U.S. We initially targeted full-time United Facilities’ employees where we helped cut turnover by a range of 39% to 58%, cutting costs and improving production metrics.

Then savvy topside leadership driven by HR Director Renna Bliss elected to take on turnover for their temporary workforce who are most interested in control and independence of their schedules. Could Stay Interviews be as effective for retaining them?

Stay Interviews are just Part of the Solution

Stay Interviews were and continue to be a crucial part of our solution, but they are joined by asking leaders to achieve two retention goals, one for all turnover and the other for 60-day new-hire turnover, and also to forecast how long employees will stay. It is these two metrics, goals and forecasts, that drive each individual supervisor’s attention and commitment to conducting Stay Interviews with their teams, and therefore learning each employee’s needs and then solving them.

For all employees…full-time, part-time, temporary, or on the c-suite level…the number one reason they stay or leave, or engage or disengage, is how much they trust their immediate supervisors. With United Facilities smart help, we’ve proven temporary employees are just the same and can be retained, even during these times.

You Can Cut Turnover by 20% or More, Even with Temporary Employees

Schedule a conversation with me at DFinnegan@C-SuiteAnalytics.com to discuss your employee retention roadblocks and I’ll share ideas for how you can move forward and what is working for other companies to cut turnover by 20% and more, even during “The Great Resignation” that may benefit you.

[i] https://www.wsj.com/articles/people-quit-full-time-jobs-for-contract-gigs-and-make-six-figures-great-resignation-11647291183?mod=newsviewer_click

The post Can Stay Interviews Cut Turnover for Temporary Help, Too? appeared first on C-Suite Analytics.

Treat Employee Retention Just as You Treat Sales and Service

In 2015 I authored a book named HR’s Greatest Challenge, published by SHRM, where at the end I listed my 30 favorite quotes…which was my way to saying if you don’t want to read every page, here are the headlines. I’ve written five books and this one might be the best. So this edition of Targeting Turnover and a few editions that follow will feature some of those quotes and the depth behind them. Today I’ll present six quotes regarding executives’ roles in reducing turnover…and therefore what you should say in that next executive meeting when all turnover-inquiring eyes are upon you.

Quote #1: How do you manage sales and service? Convert outcomes to dollars, establish goals, and then provide tools, solicit forecasts, and apply accountability. Manage engagement and retention just like sales and service.

Very unfortunately, somewhere along the way executives decided that managers should be accountable for selling to their customers and retaining their customers, but not for retaining their employees. An easy comparison is salespeople can lose a sale because of a competitor’s better product, or better pricing, or the CEO bought the product from her son-in-law instead. And your salesperson gets dinged if they fail to make their sales goals, no matter the reason why. Yet when an employee quits, HR takes the blame.

This quote says to treat employee retention just as you treat sales and service by applying the same business-driven tools. Executives are accustomed to goals and accountabilities, so those words fit their language.

Use Internal Employee Retention Benchmarks, Not Competitors

Quote #2: The best benchmarks are internal. Tell your CEO your turnover is better than your peers’ turnover and she will be happy. Tell your CEO how much your turnover costs and she’ll never ask about your peers’ turnover rates.

Comparing your turnover rates to your peer companies’ turnover rates pushes the door wide open to doing nothing. If you are worse, then “we have to do better”. If you are better, then “we’re doing good”. If you are performing slightly better than your peers, the implication is you are doing the best you can. Or said another way, your retention ceiling is being just one hair better than mediocre.

Most CEOs believe retention is mostly about pay. So they are delighted when your turnover beats your peers’ turnover because then they can save money. And if your turnover is worse than your peers, the worst outcome is HR will be asked to form a retention committee and have more social events. The same outcomes happen when comparing engagement survey results to “benchmarks”, as doing OK often means we don’t have to do anything.

Convert Employee Retention Percentages to Dollars

Quote #3: The first step to making engagement and retention first-tier metrics is to convert survey scores and turnover percentages to the CEO language, which is dollars.

This is low-hanging fruit except most HR executives don’t know how to do it. Converting turnover to dollars eliminates any discussion about benchmarks because the cost is still the cost. Most important is that finance participates in the study and also that finance announces the results…raising to a level of credibility that legitimate action at the top suddenly appears. Using the usual “two-times-annual-pay” formulas will never fly with finance so here’s a better way.

Want to convert your turnover percentage to a dollar cost?
Use our Free Turnover Cost Calculator.

Lost-Dollar Awareness for Every Instance of Turnover

Quote #4: CFOs’ jobs are to find coins in the couch, and they sleep with notepads on their nightstands. If CFOs learned the real cost of turnover and disengagement, all companies would be managed better.

Several years ago I asked the CFO of an aerospace company to join us in placing a cost on turnover. Later that day we agreed that losing an engineer cost his company $121,450. As he became more interested in this new idea, we pondered together where his annual cost of turnover compared to other costs for facilities, materials, and other major debits. The next day he called to say that he couldn’t sleep so he went to work early to extrapolate some numbers, leading to the conclusion that turnover was his second-highest annual cost.

How much more engaged would your top team be in real retention solutions if your CFO brought this level of lost-dollar awareness to the management team?

Employee Retention Relies on Building Trust

Quote #5: If you can think of one manager who can’t build trust with his team, cancel all other efforts to improve engagement and retention until you fix this problem.

Now it get dicey because executives need to learn that the #1 reason employees stay or leave is how much they trust their boss. Tracking turnover for first-line leaders and reporting it to the executive team is essential, even if you must track it by hand.

I outline more on this in my book titled HR’s Greatest Challenge which provides summaries of 25 studies that back this up.

Manage Employee Retention as a Top-5 Metric

Quote #6: Asking your executive team to manage engagement and retention as a top-5 metric requires courage—as does asking them to hold themselves and other leaders accountable.

If you are reading this piece as an HR executive, the first responsibility to make this massive retention-approach happen is on your shoulders…and this requires drumming up your own personal courage. But the tools to do so are included here, and the progress you make will become your greatest contribution, your greatest legacy to your organization.

Our Comprehensive Turnover Solution is designed to get results for companies like yours by cutting turnover 30% and more. Write me or connect with me if you want to learn more…DFinnegan@C-SuiteAnalytics.com.

The post When Non-HR Executives Ask About Turnover… appeared first on C-Suite Analytics.

Cost of Turnover and Cost of Referral Correlation

We have developed very specific, most-wouldn’t-think-of-them strategies to increase referrals such that up to half of all of our client companies’ hires come from referrals. One of those client companies connected the dots between referrals and the cost of turnover. And their outcome is brilliant.

Thinking backwards for a minute, consider those times when you debated how much to pay for referrals, maybe slugging it out with your CFO regarding how many hard dollars might fly out the door if you were fortunate enough to get any referrals at all. And I would guess when HR challenges finance over something involving money, HR usually loses. That’s where placing a dollar cost on turnover comes in…and doing so is the very first step we take with our clients.

Want to calculate your cost of turnover? You can do so for free here by using our proprietary turnover calculator.

This client provides a service to its customers delivered by skilled tradespeople, the type of worker who was in high demand even before the current applicant crunch. Nationally, there are a limited number of technicians who can do this work…and there is no easy pathway for hiring interested people and training them. Many earn greater than $100,000 per year and can find jobs with other companies in an hour. Our client has over 100 locations across the U.S. and each location is vulnerable to technicians leaving on any given day.

Buy In on Cost of Turnover and Conversion to Cost of Referral

“Leaving” is where the cost of turnover comes in. This executive team totally buys into that losing one technician for a month results in lost revenue greater than $60,000. And sometimes these jobs stay open for longer than one month. So if you knew this same type of data for your company, would you be sparring with finance over whether to pay $500 or $1,000 for each referral? Probably not.

So our client company made fast policy decisions to fill jobs quickly with employee referrals. For example…

1. The referring employee will earn $1 dollar per hour extra for one full year, resulting in a total bump of $2,000 to $3,000 depending on overtime.
2. The payout begins when the new hire joins and the only “stay” requirement is the referring employee must stay the full year to receive the continuously-paid bonus.

So this means if I refer someone who gets hired, I just earned a large chunk of cash regardless of how long my referred employee stays…because this client company smartly said it’s the company’s job to decide if the candidate will stay and not the job of the referring employee.

Is the Cost of Referral Tied to Cost of Turnover Too Radical?

But then comes the extraordinary policy part. This is a policy feature I’ve suggested to scores of clients who saw this idea as too radical…but this client said “absolutely”. When any technician refers five new hires…who must only get hired with no “stay” requirement…that technician gets double payouts for any future referrals. So instead of earning one extra dollar an hour for a year, any employee who refers five technicians who get hired would now earn two. And these referring employees have the potential to continually “recruit” new hires and consequently keep increasing their pay…with no limits.

Bold maybe? A better word is “smart”. Imagine a competitor CEO telling her board of directors, “We lose $60,000 per month when a technician job is open so we’ve initiated an employee referral program where we will pay any technician who refers a new hire a full $500 for each referral”. Not so smart…but common among most companies who don’t connect their referral payout amount to their cost of turnover data.

The key point is the top team has determined the cost of turnover and realizes paying up to $6,000 to fill those jobs is a win/win, and actually a bigger win for the company. And their cost analysis beats back any objection that these represent “soft costs”. Real revenue is flying out their one-hundred-plus doors.

The Dollar Value of Turnover is Key to Understanding the Cost of Turnover

Why is our first step with new clients that we place a dollar value on turnover? Because it’s the ice-cold-bucket-of-water dumped on their executive teams’ heads, the wake-up call that turnover is likely their second or third greatest overall expense. Finance traditionally has no interest in turnover because they see it as HR’s job, all while finance is trying to find coins in the couch to cut costs. And HR makes their top team’s understanding worse by disclosing turnover “benchmarks” which only stifle corrective actions. Compare these two scenarios:

Scenario #1:

HR: Our turnover is 28% and the benchmark is 30%.

CEO: Great work, HR!

Scenario #2:

HR: Our turnover is 28% and it’s costing us $3.4 MM per year.

CEO: We have to fix this!!!

Costing turnover is the genesis, the beginning for gaining vigorous support from your c-suite to then establish retention goals for leaders, implement Stay Interviews, and all other solutions that are part of Finnegan’s Arrow®.

Our Comprehensive Turnover Solution is designed to get results for companies like yours by cutting turnover 20% and more. Write me or connect with me if you want to learn more…DFinnegan@C-SuiteAnalytics.com.

This updated blog was originally published September 21, 2021.

The post The Cost of Referral and Cost of Turnover Correlation appeared first on C-Suite Analytics.

The Seven Proofs for Retention Have Not Changed in Two Years

As I’ve shared here over the years, data supports that as important as recruiting is, especially at a time when the number of open positions AND the number of employees quitting across our country continues to be a challenge, helping managers solve turnover to keep the employees you have is also as critical.

In my book HR’s Greatest Challenge, I outline more than 25 distinct studies that all point to one thing: managers as the main reason employees leave and dis-engage. From those 25 studies I selected the top seven that stood out the most:

1. Manager opinions impact pay and more.
2. Managers drive 70% variance in engagement.
3. Holding nurse managers accountable for retention out-performed childcare and scheduling.
4. Managers drive 22 of the top 25 stay/leave predictors.
5. School managers…principals…drive teacher turnover.
6. Poor leadership causes over 60% of all employee turnover.
7. Per Gallup’s decades of research on this topic, employees join for things and stay/leave for managers.

As a group we agreed that these seven were real no-brainers, but that the trick is what to do with the information to improve engagement and retention upon returning to work.

It Appears Two Years Later, Retention Efforts Have Not Changed

At SHRM21 in Las Vegas, SHRM placed a “The Turnover Tsunami is Coming” wall on the expo floor at the conference, asking attendees to jot and post their very best ideas for stopping turnover. The responses included recruit better, improve onboarding, and of course do more engagement surveys and exit surveys.

Two years later, SHRM21’s Wall makes it clear there was a total disconnect between what research and science tells us and what we actually have on our daily to-do lists to improve retention. If you accept that the science behind the seven studies as true… then it means you must also accept that any investment of your time in the following activities is less important than helping your managers solve turnover:

• HR onboarding new hires
• Purchasing better benefits
• Conducting engagement surveys
• Conducting exit surveys
• Benchmarking pay and benefits against competitors

Today, helping managers solve turnover is more important than recruiting new hires because of the impact of “workforce shortages” on productivity. Which is why the single most important metric regarding turnover is turnover by manager, and right behind that is turnover by length of service. This data is likely to reveal that your new hires are quitting soon after onboarding and that you’re in danger of the doom loop of recruiting, failing to grow your total headcount because new hires don’t stay, putting even more stress on recruiting as a solution to retention.

How Far Has Your Retention Come in Two Years?

Thinking back to SHRM21, attendees and I discussed precisely how to cut turnover by leveraging the seven proofs and implementing Finnegan’s Arrow which includes (1) determining turnover’s cost so executives establish retention goals, then (2) training managers to conduct Stay Interviews, followed by (3) asking managers to forecast how long each employee will stay.

Then, we discussed the resistance we often find when HR asks managers to do something extra like learn to conduct Stay Interviews including:

“We have too many meetings already, don’t have time”

“Employees leave because of pay”

“We do surveys and that’s enough”

“Employees won’t tell the truth”

“Millennials will leave no matter what”

The great news, though, is that if your executives are empowered with turnover data and dollar costs, they will be driven to require your managers to conduct Stay Interviews instead of HR requesting it. Having fully digested the cost of turnover,  the seven proofs, and the power of retention goals, it is now your executives who are instructing managers to conduct Stay Interviews and be accountable for retention instead of HR.

Closing the SHRM21 mega-session, I made the offer I make to you and anyone else who wants to have a frank discussion with their executive team on the cost of turnover. I am happy to present a short version of any of my presentations as an outside voice…an expert guide…to help the HR team shatter long-held beliefs about retention and engagement among their CEOs and other c-suite team in less than 30 minutes.

Need help establishing retention goals based on manager accountability not HR?
Schedule a conversation with me at DFinnegan@C-SuiteAnalytics.com and we’ll discuss the numbers and needs you should have to evaluate your retention goals. We work with companies in every type of industry to cut turnover by 20% and more by building trust and accountabilities.

This updated blog was originally published October 11, 2021

The post Seven Proofs Managers Drive Retention, Not HR appeared first on C-Suite Analytics.

The forced work-from-home in 2020 and 2021 has led to dreamy work situations for white-collar employees but total drudgery for employers…to the point that we now have two additional immediately-recognizable acronyms: WFH for work-from-home and RTO for return-to-office.

From the employee side, WFH represents options…for when and how to work, for easier child and elder care, and even for which state to live in. For employers, the combination of WFH + RTO = higher turnover, worse recruiting, and for-certain-resulting lower productivity. New reporting tells us this:

• 42% of companies that have mandated RTO saw a higher level of employee turnover than they had anticipated.
• Almost one-third of companies found recruiting got worse.
• And 76% of employees said they would leave if their company forced them to RTO.
• As a final kick, nearly half of candidates said they would reject roles if there is no flexibility.[i]

From the start, forced WFH looked like trouble for employers who had zero choice but to permit it during those pandemic months. One of few expected upsides was that money would be saved via reduced office space, assuming workers would remain at home. And while true for some companies, those non-renewed leases are having a massive negative economic impact on our cities which has yet to fully hit home. And city-based hotels and restaurants are feeling the same whack.

But if there was another employer win from WFH, I can’t see one. Turnover is up and Gallup tells us employee engagement is down for the first time in a decade, saying this specifically about WFH:

The largest decline in employee engagement was among those in remote-ready jobs who are currently working fully on-site — this group saw a decline of five points in engagement and an increase of seven points in active disengagement. It’s worth noting that exclusively remote employees saw an increase of four points in “quiet quitting” (aka not engaged in their work and workplace).[ii]

Some Predict CEOs Will End WFH

Fortune published a recent report predicting CEOs are running out of patience with WFH, citing the following reasons[iii]:

#1: Remote work is bad for new hires and junior employees.

#2: Workers admit that remote work (sometimes) causes more problems than in-person work.

#3: Remote workers put in 3.5 hours less per week compared to in-person workers.

#4: Productivity plummets on days when everyone is working remotely.

I remember two 2021-ish Wall Street Journal articles that nailed the problem. In one a CEO said he could not imagine a recent college grad developing adequately via zoom meetings versus walking the halls with her in-office, more-experienced colleagues. And the other article profiled four employees who had been hired and then quit within six months because zooming alone didn’t help them build relationships with their managers nor their peers.

Yet Employees Have More Power…and Will Continue to Have It Regarding WFH or RTO Decisions

The major obstacle is workers now have the upper hand. That the sheer number of workers across the U.S. cannot meet the demand for filling open jobs, permitting employees to make decisions that severely impact organizations rather than the traditional other-way-around. And the Census Bureau tells us this won’t change anytime soon because our baby boomers are retiring and there just aren’t enough younger workers to take their places.[iv]

The Census Bureau also tells us in the same report that 51% of all new workforce entrants will be immigrants beginning in 2030, and that percentage will increase throughout the foreseeable future. This comes at a time when Americans’ favorable opinion of immigrants continues to go down[v], likely influenced by the continuous streaming of Mexican border stories across TV news as though these are the only immigration examples.

What To Do? Regardless of WFH or RTO or Hybrid, Retention Should be Addressed

CEOs are ultimately deciding their organization’s WFH/RTO strategies, choosing from (1) total WFO, (2) total RTO, or (3) various forms of hybrid scheduling. But among the hundreds of online reports about companies’ decisions, little is said about how those organizations should engage any resulting zoomers in order to retain them…and this is a topic that fits right into our sweetspot. Generic recommendations call for managers to build stronger, more personal relationships with their individual team members, yet those same generic recommendations come up short on how to do this.

As our company has proven for a decade-plus, Stay Interviews provide managers with a structured method to learn their employees’ greatest day-to-day needs and then meet those needs. This specific WFH retention solution is to combine the five Stay Interview questions with skill-building for asking those questions, listening to each employee’s responses, probing to learn more, taking a full page or two of notes, and then building individualized stay plans to retain that employee longer.

Need help establishing retention goals for WFH, RTO, or Hybrid?  
Schedule a conversation with me at DFinnegan@C-SuiteAnalytics.com and we’ll discuss the numbers and needs you should have to evaluate your retention goals. We work with companies in every type of industry to cut turnover by 20% and more by building trust and accountabilities.

The Stay Interview goal is to identify and address work-driven issues versus virtual happy hours and other social activities which fail due to their simplicity, their superficial quality. While helping employees meet their peers virtually is a worthy objective, the absolute most important relationship is the one they develop with their manager…and that manager must have training and tools to lead that relationship.

Improving retention and engagement among WFH employees is a very, very tall task. Training managers to facilitate Stay Interviews on a regular schedule provides the absolute best opportunity to retain and engage them.

[i] https://www.msn.com/en-us/money/careersandeducation/we-re-now-finding-out-the-damaging-results-of-the-mandated-return-to-the-office-and-it-s-worse-than-we-thought/ar-AA1eDefg?ocid=hpmsn&cvid=1c82f1dc40644b398135a3d0e5745381&ei=16

[ii] https://www.gallup.com/workplace/468233/employee-engagement-needs-rebound-2023.aspx?thank-you-subscription-form=1

[iii] https://www.msn.com/en-us/money/markets/bosses-are-fed-up-with-remote-work-for-4-main-reasons-some-of-them-are-undeniable/ar-AA1cyh0l?ocid=hpmsn&cvid=6ab063aa84fa4eb5abcae434f66ef879&ei=18

[iv] https://www.census.gov/library/publications/2020/demo/p25-1144.html

[v] https://news.gallup.com/poll/508520/americans-value-immigration-concerns.aspx

The post Confirmed: Mandated Return-to-Office = Higher Turnover appeared first on C-Suite Analytics.

First, We Should be Calculating Turnover as Dollars Not Percentages

Our company’s Finnegan’s Arrow model is the spine for each of our retention solutions. It’s the starting point for each action we take with our clients, laying out a solution sequence that you can see here:

Note that we start with “Dollars” because we’ve learned over many years that any retention initiative must be sustained, must stick over time rather than become the flavor of the day. And the way we ensure our efforts grow deep roots at the top is to place a dollar value on turnover. And maybe most importantly, we require finance to participate in that turnover cost calculation.

We think of CFOs…chief financial officers…as master whisperers, meaning what they say in executive meetings carries great weight. Even though some CFOs I’ve worked with hardly ever whispered about anything. And here’s a message we say to CFOs about their roles in turnover…and please, CFOs, don’t take offense:

CFOs go to work each day trying to find the quarters in the couch. You search your screens each morning for ways to increase revenue and cut expenses, finding those micro solutions that eke out a nickel here and a nickel there. And you do this while turnover is costing your companies millions of dollars, and those leaking millions of unbudgeted losses are usually assigned to HR down the hall.

This is what CFOs have been trained to do. Not once have I met one who studied in college how to measure the cost of turnover. Not once.

Imagine walking down a city street and someone approaches you speaking in Japanese. Bewildering as this would be, it’s not far from HR reporting turnover to their c-suite in percentages that are not translated into dollars. CEOs speak dollars, it’s their language, and they don’t immediately connect the dots when turnover is reported as a percent.

Even worse is when turnover is reported against outside benchmarks, as in “Our turnover for this period was 24% but the industry benchmark for this period was 25%”. The usual c-suite outcome then becomes, “Great! We’re winning!”…when the truth is you are just one skinny percentage point from being mediocre. And that winning belief is just enough to stifle improvement actions from the top.

Calculating Turnover’s Cost

So let me make this easy for you. Our free turnover cost calculator is available from our home page. I’m copied on any entry made and I will email you with suggestions if I see ways you can use our calculator better.

Our calculator will measure the cost of turnover for one targeted job you choose. Our calculator is detailed, comprehensive, and will sort each data point you enter into two ultimate turnover cost categories which we call direct costs and lost productivity. Direct costs are the ones you would typically associate with turnover such as temporary help, overtime, recruiting, advertising, drug tests, training, onboarding, and more. When designing a turnover cost calculator, measuring direct costs is the easy part.

Calculating the Cost of Lost Productivity is More Complex

Placing a dollar value on lost productivity is more complex…but actually more important. Any executive including CFOs can readily see that losing an employee and hiring another costs money for training, for recruiting, for new uniforms and more. The deeper mystery is how much do we lose when a job remains open for weeks or months so the work must be done by others…or not done at all. And the same can be said for new hires ramping up, filling the job in those early weeks when that new hire cannot possibly replace the productivity of the employee who left.

The reality is no one can calculate lost productivity precisely. But our model provides a very good-faith estimate that few CFOs have ever disagreed with. The calculation is based on the assumption that all company revenue is provided by all company employees…and here’s how it works:

• Enter your organization’s most recent annual revenue divided by total FTEs, and your CFO will have these figures; our model offers a standard figure based on the Saratoga Institute’s database which is $240,000, but use your company’s amount instead.

• Divide that resulting amount by 240 which is the average number of days your employees likely work in a year, resulting in your now knowing the average daily revenue value for each employee in your company; if your input for #1 above is $240,000, you have now learned that the average employee contributes $1,000 to revenue each day.

• But we of course want to know the daily value for your targeted job vs the average job…so we will assume the value of your targeted job is based on how much you pay for that job relative to other jobs; for example if the average annual comp and ben for all jobs in your company is $50,000 and your targeted job pays an annual average of $100,000 in comp and ben, you would double the daily value for your targeted job; in our example your targeted job would now be valued at $2,000 for daily revenue.

So how many days should we apply for lost productivity? Think of these days in two buckets:

1. The number of work days the job stays open, the days when no one is being paid for this job.
2. And the number of work ramp-up days divided by 2 since the new hire is contributing more each day on an increasing scale; a good hint is to estimate ramp-up days conservatively determining how many days until the new hire can do the job’s basic duties independently.

Now add A + B, and then multiply the result times the targeted job’s daily revenue to learn the targeted job’s gross daily revenue. Moving that figure from gross to actual…and final…requires subtracting any funds you spent for temporary help or overtime which you did to buy productivity, and also subtracting the pay and benefits you saved for those days while the job was open.

Study the logic first, but don’t get hung up on the math complexity because our online calculator is programmed to do the math for you. The calculator will also add the direct costs to the lost productivity and you will then know the total cost of turnover for your targeted job.

Let’s close by taking a helicopter up 5,000 feet to realize what we’ve just accomplished. Now your CFO and subsequently your total c-suite have taken the first step to see turnover as an extreme and un-budgeted expense…in dollars…providing the wake-up call for your executives to take intentional, accountability-driven actions to reduce employee turnover. And that’s why “Dollars” are first on our Finnegan’s Arrow comprehensive turnover solution.

How Much is Turnover Costing You? Do You Need Help Sharing Its Importance with Your C-Suite? 
Schedule a conversation with me at DFinnegan@C-SuiteAnalytics.com to discuss your turnover concerns and I’ll share ideas for how you can move forward using dollars instead of percentages and benchmarks to get your C-Suite team’s attention. It’s working for other companies in every type of industry to cut turnover by 20% and more.

The post Calculating Turnover’s Highest Cost: Lost Productivity appeared first on C-Suite Analytics.