Significantly beating analyst expectations, the labor market represents the resiliency of the U.S. economy.

Once again, it seems the labor market is a beast that cannot be tamed – not by recession expectations, not by the highest interest rates in over twenty years, nor by inflationary pressures.[i]

U.S. employers added 353,000 new jobs in January, followed by the BLS’s revising their added-jobs number for December from 216,000 to 333,000. Whereas the industry mainstays for adding jobs have historically been government, healthcare, and leisure & hospitality, even manufacturing and retail got a boost.

Introducing The Great Gully

Many in the media are saying “The Great Resignation” is over…though maybe “the great gully” will drive attention to the real culprit here. The report cited above noted that one reason given for the constant hiring in healthcare is “the aging population”. Last year I consulted with the Census Bureau by initially asking that with all of the baby boomers on track to retire or having already done so, how many net new workers will enter the workforce going forward. The answer is very few. Specifically, a net change of just 3.7 million more workers will join the U.S. workforce during this decade. Then the Census Bureau disclosed that their projection was done prior to COVID-19 for which fed chair Jerome Powell said caused us to lose 3.5 million workers. That’s leaves a net addition of just 200,000 workers for this decade. And more than that number are changing jobs each month. Yikes.

———–

Further Reading: The Labor Shortage Wake-Up Chart is Here

———–

Doing The Math on Jobs Report

So we know our economy added just short of 700,000 jobs in the two-month period of December and January. Given that our unemployment rate is low…3.7%…and there are few new entrants into our workforce, it’s a cinch to conclude that the great majority of those 700,000 new workers were actually job-changers, that they left one job for another job. And those workers can easily change jobs not only because they can job-search during their workdays on the computer you gave them, but there remain a full 9 million open jobs across our country. For comparison, that is about one-third more open jobs than we had just prior to the pandemic. And since then we’ve lost the 3.5 million workers as mentioned above plus we’ve seen a downward plunge in new workers entering our economy.

Media Reports of Layoffs Don’t Impact Your Business

Media outlets search for any alarming data to gain your attention so layoffs are red meat for them. But while tech companies and others are occasionally shedding workers, the actual number of workers being laid off and the resulting overall percentage that is exiting our workforce are not alarming. BLS data has been telling us since the pandemic that exits of any kind are at all-time lows.

———–

Further Reading: Is Recruiting Today a Doom Loop for Tomorrow’s Turnover?

———–

Back to Dogs-Chasing-Tails

Never has employee retention mattered more. Beyond the obvious reasons, consider that top performers out-perform average performers by 4 to 1.[ii] Chewing on that for a moment, one first realizes that all employees are not equal. But during these dog-chase-tail times, retaining even your average workers versus having to dip into the highly competitive recruiting pool makes more sense than continuously playing in the doom loop of recruit/train/do exit interviews and then start over.

Should you wish to learn a research-based way to cut employee turnover, start here, then email me if you’d like to learn specific ideas and results for cutting turnover in your industry, dfinnegan@c-suiteanalytics.com.

[i] https://www.shrm.org/topics-tools/news/talent-acquisition/bls-hr-jobs-unemployment-feb-2024?utm_source=marketo&utm_medium=email&utm_campaign=editorial~Talent~NL_2024-02-07_Talent-Acquisition&linktext=Job-Growth-Explodes-in-January&mktoid=49296740&mkt_tok=ODIzLVRXUy05ODQAAAGRI75-cvvBeJPT21xjAkczzmlbwyrtq9mWP3TCJeg80Eu59_xB4yPlSDjXJu5jyD5V81p36IJ-ReGWDnXHIX2ZePGJCrBZSIE13hmoAitTu4wtymGw

[ii] I learned this and other retention-related research when collaborating with an industrial/organizational professor several years ago.

The post January Numbers Prove Recruiting Alone Is Dog-Chasing-Tail appeared first on C-Suite Analytics.

“The Great Resignation” is not about young employees

While the above scenario is true, two reports throw a heavy wrench into the assumption that “The Great Resignation” is only about young, low-paid, entry-level employees.

AllVoices^[i] surveyed 400 HR executives regarding their turnover and found this eye-opening distribution when asked which lob level had the most turnover:

Mid-level         37.5%

Senior level     34%

Entry level       28.5%

Think about that. More than 70% of 400 HR executives said most turnover is NOT coming from entry-level workers. The study also tells us more than 80% of those who quit had been with their employers more than one year with the highest group being three to four years. So the cost of turnover from “The Great Resignation” just rocketed up.

The significance of the three-to-four-year mark is because other studies tell us millennials stay an average of two years and nine months. The oldest millennials turn 40 this year, so the data here implies the largest group of those who quit are also above 40.

Conclusion: The majority of workers we are losing during “The Great Resignation” are older, have more tenure with our companies, and are more likely to be in professional jobs than the commonly held belief that most of those who quit are entry-level workers.

“The Great Resignation” motivation is about more than pay

Very related, The Wall Street Journal reported on an Upwork study telling us more about professional freelance workers.^[ii] 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 their greatest motivators? Eighty percent said control over schedule while 73% indicated location flexibility.

The chart below represents the number of new, entrepreneurial businesses formed before and during the pandemic. Consider that this huge spike includes only those businesses for which someone registered for a license. Our government says you don’t need a license if you “conduct business as yourself using your legal name”. This chart represents just those new businesses that have been registered…and likely does not include uber drivers, put-a-sign-out-front professionals, dog-sitters, or many others who abandoned corporate America during “The Great Resignation.”

Note that the spikes appear to represent monthly data, so the total increase in entrepreneurs is in the millions considering the left axis represents 400,000 to 500,000 job gains each month. And again, this is just a partial list.

Few if any of these workers left their jobs to make more money. They instead walked away from corporate America jobs. These two examples always race to my mind:  

• The mid-forties healthcare worker who told the Wall Street Journal he decided during the pandemic that his highest value was taking his daughters to soccer practice which his then-corporate job wouldn’t permit him to do, leading him to start his own from-home healthcare consulting business.

• And thousands of restaurant servers who liked their jobs in 2019 when they lost them, but then took online courses and found more fulfilling jobs rather than return to work weekends and holidays serving customers.

But anyone who believes pay is the automatic, reflexive answer for retention is way, way off the mark.

“The Great Resignation” needs more than a one-size-fits-all approach

What does this mean for you? The common answers would be to implement flexible schedules and work from home policies, the trendy go-tos for to counter “The Great Resignation.” Oh, and raise pay, too, even though as reported here previously pay is the 16^th highest reason why employees are currently quitting.

The problem with this approach is it’s one-size-fits-all, that it presumes you know precisely which types of schedule flexibility that each of your employees want. In the Wall Street Journal article referenced above, one new entrepreneur who recently left corporate America said his most important priority was taking his girls to soccer practice. You can’t build a policy around that…and it might not be important for that employee two years from now.

The real wake-up call here is “The Great Resignation” has affected all levels and ages of workers, not just entry-level workers. To retain and engage your employees you will have to employ solutions that work for every level, every worker, and for years to come, even when “The Great Resignation” is over.

We’ve cut turnover and improved employee retention even during “The Great Resignation”

Just in the past year, our clients have saved over $2 million by implementing employee retention goals for managers and training them to conduct Stay Interviews the right way, which solves employee retention issues one at a time…all while building trust so turnover continues to decline. And those savings will grow and continue year after year.

Are your strategies for employee retention working?

If not, it may be time to consider a different approach. Schedule a conversation with me at DFinnegan@C-SuiteAnalytics.com to discuss your plans, your roadblocks, how to 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.

This updated blog was originally published March 21, 2022

[i] https://www.allvoices.co/blog/hr-and-the-great-resignation-whos-leaving-hiring-outlook-and-strategies-for-retention

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

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Service Is Suffering During The Great Resignation

Given the data regarding The Great Resignation, it’s clear that service is worse all over. And that same data makes clear these service snafus will be with us for the long haul.

Then comes this phrase “Quiet Quitters.”, introduced to us by Sona Movsesian who is Conan O’Brien’s assistant.[i] Sona is so proud of her job neglect that she wrote a book about it called The World’s Worst Assistant that is said to be a New York Times bestseller. In a recent interview…yes, Sona is also doing interviews…she said this:

“I realized very early on, I’m just going to be mediocre…and that’s totally fine with me. Most people are mediocre.”

Sona’s slacker pride comes at a good time for her fellow slackers across our country because replacements are so hard to find that the number of workers getting fired is at an all-time low.[ii]

Quiet Quitting and The Great Resignation

So what to do if you are managing our now ex-drugstore that loses prescriptions where no employees seem to care?

1. Coach them, coach them, then coach them some more
2. Treat them gently knowing how hard it is to replace them
3. Counsel them once, maybe twice, then fire them the next time

The correct answer can only be C because if you let one employee slide, peer employees will also slide while the best ones will quit. I wrote about this several months ago and it appears nothing much has changed. Maybe Sona is right that most people are mediocre.

But then, maybe she’s not right at all. Employee accountability is a wonderful thing because it is the bedrock of great organizations. The reason why Chick-fil-A® employees say “my pleasure” is so they don’t say “no problem”, differentiating them from their peers at McDonald’s. And hearing them say “my pleasure” is as consistent as the beat of a drum because their manager holds them accountable for saying it.

Can We Overcome Quiet Quitting Ennui?

I’m convinced that only those CEOs who fully understand the causes, depths, and projected lifespan of The Great Resignation can truly understand there will be winning and losing companies as a result. While journalists write about inflation, supply chain woes and a potential recession, only the sharpest economists know that our national workforce shortage is the genesis of them all. Two contributing pre-pandemic trends have been staring us in the face for a long time, that our birthrate has been plummeting for 70 years and young workers are far less loyal than the baby boomers they replace. Then the pandemic tossed in millions of early retirees, parents staying home with kids, and one million-plus non-expected COVID deaths. This chart will pop your eyes open regarding our nation’s declining birthrate:[iii]

If not for immigration we would be Japan, living with a declining population and a similarly declining economy.[iv]

Few, too, understand how many former corporate employees chose entrepreneurship in the face of pandemic layoffs and subsequently rethinking one’s priorities. This chart shows the incredible increase in business licenses once the pandemic hit:

And many work-for-yourself jobs don’t require a license, with just one example being the 4 million-plus Uber and Lyft drivers who seem to be pleased with non-corporate jobs.

Quiet Quitters = Retention Opportunity for Best Workers

In the face of The Great Resignation, nothing matters more than retaining your best and even good workers.

“Nothing matters more” covers a lot of ground. But I can’t think of one thing businesses do…customer service, product development, increasing sales, etc…that actually matters more than retaining workers. A recent study of HR professionals reveals that the top assignment from the CEO list is improving retention. And retention is not only the solution to keeping good workers but also to reducing the number of open jobs.

Stay Interviews as part of a comprehensive retention solution puts direct supervisors in the driver’s seat by addressing each employee as individuals and as people who can build trust, whether they are “mediocre” or not. Is it hard to counsel and work to retain Quiet Quitters? Absolutely. But if you don’t, you’ll be surrounded by them, and your company will fail.Building trust with employees and having direct managers accountable for that retention is a good way to overcome lamenting the Quiet Quitters to focus on the opportunity to keep your best workers.

Need help establishing retention goals based on manager accountability to retain your top employees? 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 September 22, 2022.

[i] https://www.msn.com/en-us/money/careersandeducation/conan-o-brien-s-assistant-who-s-quiet-quit-her-job-for-over-a-decade-says-it-s-okay-to-be-mediocre-and-find-ways-to-do-the-minimal-amount-of-work-possible/ar-AA11oUXH?cvid=96ddc06886b84d61ab9f1587deef8f80

[ii] https://data.bls.gov/cgi-bin/surveymost

[iii] https://www.cdc.gov/mmwr/volumes/69/wr/mm6901a5.htm

[iv] https://www.scmp.com/news/asia/east-asia/article/3188348/japans-population-drops-most-9-years-number-over-65s-hits

The post Quiet Quitting is Really a Retention Opportunity appeared first on C-Suite Analytics.

The Reports, Numbers, and Trends Don’t Lie About Employee Retention

What is consistent, though, are reports that employee quitting remains strong. So strong in fact that the highly-respected Gallagher 2023 Workforce Trends Report says in their survey of 4,000+ organizations that employee retention remains priority #1.[i] A full 66% of HR executives say so, but more eye-grabbing is that greater than half of operations executives said the same. This means the manufacturing execs who must get product out the door now see turnover as their main obstacle, just as healthcare CEOs are seeing nurse turnover as the major driver of patient-care shortcomings along with ever-increasing agency costs.

The deep-seated cause is not “The Great Resignation” but is instead “workforce shortages”. Get ready to see less of the former term and more of the latter. I could list bunches of contributing data here including as just one example that COVID has removed more than a quarter million people from our workforce. But the major factor is baby boomers are retiring and there are flat-out not enough native-born Americans to replace them. During the next ten years our total U.S. workforce will grow at a slower pace than at any time in our history, all while striving to retain our position as the world’s top economy. Side-stories abound but here are two:

• Our Census Bureau says 51% of new workers will be immigrants beginning in 2030, and that percentage will increase for as far out as they can predict.[ii]

• Whereas baby-boomers have stayed with employers an average of 8 years 3 months, millennials stay 2 years 9 months and gen Z an average of 2 years 3 months.[iii]

Making this last point scarier, millennials and gen Z comprise a full 51% of today’s U.S. workforce…and millennials alone will dominate by being 75% of the workforce by 2025. Remember when we said young workers can’t keep up the constant job-hopping because the economic realities of adulthood, families, and rest will eventually sink in? Young workers have won, assisted by the historically high number of job openings that isn’t going away.

Right Problem, Wrong Solution for Cutting Turnover

But here’s where the Gallagher report gets way off course because their opening solution for cutting turnover is about pay:

Retention far out-ranks other top operational and HR priorities in 2023 – putting total rewards and the employee experience in the spotlight, right alongside heavy investment in base salaries.

And they go on to say…

Responding to labor shortages and turnover, many organizations enhanced compensation and benefits to lower the risk of losing the talent they need to meet business objectives. In 2022, private industry worker costs rose 5.1% for wages and salaries, and 4.8% for benefits compared to a year earlier.

We could offer Gallagher a pass regarding their comp and benefit bias because they are a for-profit consulting firm that added a sub-title to their report which reads, “Benchmarks for benefits, HR, and people strategies to help organizations thrive”.

Yet I would ask Gallagher this question:

Can you show me proof, actual academic research, that says that increasing pay or benefits provides a long-term impact on employee retention?

I don’t think they can. Nor can Gallup or any other research and consulting organization. And no one is predicting “The Great Resignation” is over because employers have raised pay.

HR’s Greatest Challenge is the name of a book I authored several years ago that contains summaries of 25 highly-respected studies that all point in the same direction…that the #1 reason employees stay or leave, or engage or disengage, is how much they trust their boss.

Yet organizations continue to listen to consultants who put them on this path:

1. Review engagement survey and exit survey results.
2. Identify the top employee concerns.
3. Appoint an employee committee to identify solutions.
4. Implement one-size-fits-all solutions.
5. Re-survey to find the same problem has not improved.

Example: Employees’ top concern is recognition so solutions include employee-of-the-month, employee appreciation week, free parking space, get a backpack at 5 years and a clock at ten. Then future reports show no improvement.

Focus on Individuals, Not Systems and Surveys for Employee Retention

Failure here is because employees are asking that their manager recognize them instead of a system. That as humans we crave for human emotional experiences that are sourced from someone important to us…in this case the one person we interact with each day who determines our job security along with our daily feelings about our jobs.

You can read more about the sketchy impact pay has on retention, along with 6 examples of clients across all industries that have cut turnover by 20% and more by implementing Stay Interviews and holding leaders accountable for retention goals.

We should thank Gallagher for their excellent research about the importance of employee retention. And then we all need to become better informed on why employees quit and how to fix it.

Need help establishing retention goals based on trust not pay?
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.

[i] https://www.ajg.com/us/-/media/files/gallagher/us/2023/workforce-trends-report-2023-organizational-wellbeing.pdf

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

[iii] https://www.careerbuilder.com/advice/blog/how-long-should-you-stay-in-a-job

The post Gallagher Reports #1 Workforce Priority is Still Turnover appeared first on C-Suite Analytics.

Labor Shortage is Equal to Workforce Shortage

Let’s then get ahead of the curve and say “workforce shortage” instead. And we’ll be saying “workforce shortage” for a long time. So says the Census Bureau which has released this chilling chart:[i]

The data is painfully clear, that we will not have enough workers to fill our open jobs for a long time. Note that 2025 is the bottom, and the following few years are as bad or worse as our most recent couple of years.

The measurement here is how many among us are in the age group of 18 to 64. This does not account for the growing number of people who will retire prior to age 64, or the exponentially-growing number among us who are choosing to become self-employed, or those who just choose not to work. This chart is age-driven only.

So if you have a fixed number of workers who fall far short of the number of open jobs, how do you add to that number of workers? Some states are already so desperate that they are trying to legally reduce some restrictions in their child labor laws.[ii]

Immigration Issues Drives Workforce Shortage, Too

Then here’s another approach, re-stating a quote from previous editions here, published originally by the Burning Glass Institute:

“If immigration does not improve, I’m not sure how we get back to growth”.

While the approach feels right, Gallup’s finding is that Americans are more opposed to immigration today than in the past[iii]…

…while other reports say the U.S immigration system is broken, such that Canada and the UK are reaping the best world-wide STEM minds by accelerating their immigration processes.[iv]  

The consequences for businesses from the top chart here are that talent will become even more scarce, services of all types will further deteriorate, economies will suffer…and we’ll return to talk of supply chain woes and resulting inflation. And as has been true for recent years, hardly anyone will get fired because any body is better than no body at all.

The only smart way out is to retain the good workers you have…rather than constantly chase your tail by picking off what could become a scrap heap of transient workers who will leave you for fifty cents an hour. Or new hires who don’t show up for day two.

Why are Current Workers Choosing to Stay in the Workforce?  

Why do workers stay? Thousands of words have been written that supposedly answer this question. But the most qualified answer is really quite simple. Because they trust their boss. Because during their commutes to and from work…even if that means walking down their home hallway…they feel good about the people who surround them. That includes their first-line supervisor and others who that same first-line supervisor has placed within their daily work team. And that team is supportive, communicative, but most of all productive.

Too simple, you say? This was the overwhelming finding I discovered when an industrial/organizational psychology professor pointed me toward about fifty academic studies on why employees stay. In one book titled HR’s Greatest Challenge I summarized 25 of these studies so readers would learn the easy-to-grasp-but-harder-to-make-happen most important employee retention solution.

Stay Interviews then become the tool, the method, for each first-line leader to build trust one-on-one with each member of her team. Asking five carefully-researched questions, listening, probing, taking notes, building a plan…to make each employee’s day-to-day work better.

What is your company’s best employee retention solution? Try to answer this without saying something we all know they can replicate or get more of elsewhere. That omits pay, benefits, schedule, commute, career coaching…and the opportunities to complete annual engagement surveys or a one-time, ineffective exit survey when they leave.

The absolute, only thing you can offer your employees that encourages them to stay that they cannot get elsewhere is a boss they trust and a team who makes them laugh and thrive. And that starts with each first-line supervisor because employee retention is solved at the bottom of organizations and not at the top. Nor from the side with one-size-fits-all HR programs that cannot overcome an employee having a jerk boss who will drive her to leave…especially when jobs are as plentiful as they will continue to be.

You Can Cut Turnover by 20% or More, Improve Engagement and Retain Your Workforce

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] As published here: https://www.marketwatch.com/story/the-real-labor-shortage-is-looming-and-everything-were-doing-is-making-it-worse-11657213385

[ii] https://www.epi.org/publication/child-labor-laws-under-attack/

[iii] https://news.gallup.com/poll/1660/immigration.aspx

[iv] https://www.vox.com/future-perfect/23177446/immigrants-tech-companies-united-states-innovation-h1b-visas-immigration

The post The Labor Shortage Wake-Up Chart is Here appeared first on C-Suite Analytics.

Short Tenure of Young Workers Significantly Impacts Retention

On one hand, learning that young workers’ tenure didn’t get even shorter during “The Great Resignation” raised an internal alarm. How could it be that with so many open jobs that those young workers who stray so frequently didn’t stray even more? Then the author said maybe the likely additional quits were offset because we’re at a historic low of firing people. That makes sense.

Here’s the data. Give it a close look:

So 44% of workers ages 18 to 34 stay more than three years, whereas 40% of that same worker group leave within a year. The study digs deeper with data by job, race, and gender, with the big take-away being those in professional jobs stay longer.

Our focus here is how do we keep them longer. What actions can your company take to make the 44% figure higher and the 40% figure lower? Here are three good ways to do this:

1. Build realistic job previews: Our client work tells us that those who are counted here as leaving in the first year likely include a high percentage who left in their first 60 days. Think of this as the “you gotta be kidding” group who entered work on day one and couldn’t believe something about your job. That could be the loud noises, wet production floors, longer-than-promised hours, forced shift changes…or maybe a jerk boss. Commit to telling applicants the top tree reasons employees quit and the same for employees who get fired. Don’t sugarcoat but be real. Then track the number of fewer employees who leave early.

• Double your percentage of employee referrals: For most companies this means go from about 15% to 30%, not a major leap. But teach yourself that you can invent methods that work because studies have shown that referrals stay longer and perform better. Besides, we must all find alternatives to “help wanted” signs and Indeed. Hold referral open houses and ask your current employees to bring someone/increase your award amount/publicize your program more/hold new-hire trainers accountable to a referral goal because new hires know the most outside people. Or my favorite idea is telling your employees that anyone who successfully refers three new hires will earn double the stated award amount going forward for as long as they work with you.

• Use this simple job-offer script: “I’m offering you the job of ___ that pays $___ and has these very good benefits: ___. While I hope you say yes to my offer, I only want you to do so if you can see yourself being with us for at least a year. This is not a legal commitment but an ethical one. So if you are waiting to hear about another job you’d rat her have, or might relocate or go back to school for example, please say no to my offer. Our relationship will be based on trust and that trust starts now.”

Some candidates might lie but many will tell the truth, too. And they’ll remember on a bad day during their fourth month that they committed to stay at least one year.

Retention of Young Workers is the Same as Retention for All Workers – Manager Accountability

And of course, the very best way to retain newly-hired young workers…or any new workers…is to hold their managers to a new-hire retention goal and teach them to conduct Stay Interviews at least twice during the new-hire goal period. As an example, our manufacturing client companies usually establish a goal to retain 80% of new hires for 60 days. While they put into practice all of the ideas included here to make that goal, most important is their first-line supervisors conduct two Stay Interviews during the 60-day period, usually at two weeks and six weeks. All is part of our Finnegan’s Arrow model shown here:

So which of the five Arrow components matters most to improve new-hire retention? The answer is Accountability. Imagine opening your computer to see reports for each of your first-line leaders that tell you…

• Progress toward two retention goals being all turnover and new-hire retention
• Number of Stay Interviews completed and number that are late
• Each individual employee’s most recent Stay Interview, retention forecast, and stay plan
• The percentage of employees who actually have a stay plan

And most importantly, each first-line leader’s termination report that discloses who left, their  length-of-service, their retention forecast, whether they had a specific stay plan to keep them, and the contents of that stay plan.

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.pewresearch.org/short-reads/2022/12/02/for-todays-young-workers-in-the-u-s-job-tenure-is-similar-to-that-of-young-workers-in-the-past/

The post Young Workers’ Job Tenure Remains the Same: Short 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. By way of their required anonymity, surveys give broad trends vs individual employee responses meaning the inputs of your best performers and those you will terminate tomorrow gain equal weight. 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.

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 sabotagers…a full 92% scored their manager relationships a 1 or a 2.

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 we offer clients which I invented with a book in 2012. 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 in-house, 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.

The post From Stagnation to Success: You Can Improve Employee Engagement appeared first on C-Suite Analytics.

Why Did People Quit During “The Great Resignation”?

So why did they leave? Higher pay and better working conditions were the primary answers given. What do they miss most? Their co-workers.

As today’ trendy news reporters say, there’s much to unpack here. Let’s start with why they left.

1. Raise your hand if you’ve ever decided to leave a job you loved for more pay – just more pay. I’ll bet a month of my pay that 90% of those leavers who reported they left for more pay originally went looking for a job because they wanted to escape from their current job AND got more money as a result of their search.
   
2. “Better working conditions” is the second-named reason why those who leave went looking. What the heck does that actually mean? Do they all work in places like beef packing plants and can no longer handle the raunchy smell?

Each year at the SHRM annual conference I poll my audience like this:

• Raise your arm if your company does exit surveys…and nearly everyone raises their arms.
• Now raise your arm if you’ve made your company better by doing exit surveys…and never have more than 5% of the audience raised their arms.
• Now shout out-loud to the audience why you cannot improve your company with exit surveys…and immediately many shout together “because employees don’t tell the truth”.

The lesson from my poll and this study…and any other survey on “why employees left”…is that all the data is self-reported. The leaving employees are the only source of information for the reasons they left. Why can’t you trust that data? Come on and shout it out with me, “because employees don’t tell the truth.”

Now let’s go deeper on that second reason why employees say they left which was “better working conditions”. I once googled for the number one reason employees quit and found about ten different #1 reasons with the most frequent being “better opportunity”…which I’ll consider to be a cousin to “better working conditions”. The main reason “better opportunity” appears so often is because it is a standard potential reason on every exit interview checklist. Whether HR interviews the leaver or the leaver self-reports, “better opportunity” is a wonderful generic trash basket in which to toss a broad range of real responses. And it tells us nothing…though it is often interpreted to mean more pay.

And before we leave “more pay”, the self-reported data tells us more money was a main reason for leaving. So what is the real value of for example a $5,000 annual raise:

• An estimated 25% goes to the federal government
• Another estimated 10% goes to local government
• Most companies do payroll 26 times in a year

So a $5,000 raise equates to $125 per paycheck. This is such a small amount of money that one wonders if most raises are more about recognition than about cash.

And What Was It These Employees Missed the Most After They Quit?

Co-workers. Most said they miss their co-workers so much they wish they hadn’t left. And at about the same time the Paychex study was released, so was a related article in a report titled 85-year Harvard Study Found That People With This Type of Job Tend to Be the Unhappiest.[ii] Here’s that finding:

Jobs that require little human interaction and don’t offer opportunities to build meaningful relationships with co-workers tend to have the most miserable employees.

Which makes one wonder what matters more to employees when choosing from great co-workers or a $5,000 raise. I think the winning play would include good co-workers along with great recognition.

The Root Cause of Why Employees Quit Seems to be Missing

So we have millions of employees who are supposedly leaving for more pay but their regret is missing their co-workers. But there is no word on whether they miss their previous supervisors. Could it be…just maybe…that those supervisors are the real reason those millions of employees left?

Gallup tells us that a full 50% of employees who seek other jobs do so because of their managers.[iii] So let’s say at least half of these millions of quitters did so not because of pay nor because of better working conditions, but because of their boss.

The Q5 Tell Us Why Stay Interviews Work to Combat Quitting

Our company consistently helps client companies cut turnover by 20% and more, and our solution details how it would have greatly reduced the number of employees who left. That solution includes costing turnover, establishing retention goals, training first-line managers to conduct Stay Interviews and forecast how long each employee will stay…and then holding them accountable for retention outcomes. The hidden solution, though, is the scripting and training related to the five specific Stay Interview questions:

1. When you travel to work each day, what things do you look forward to? To begin with a positive question that brings the employee’s thinking into the present hour here and now.
2. What are you learning here? Helping employees learn is an easy gift to give, whereas career talk should be reserved for those employees who might actually have a career with your company.
3. Why do you stay here? My favorite, in part because many employees don’t immediately know the answer and therefore must discover it and announce it to themselves. And knowing this answer along with the answer to Q1 tells us how to make employees happy.
4. When was the last time you thought about leaving our team? And what prompted it? “When” signifies that everyone thinks about leaving so it’s OK to say you think about it, too. And responding to Q3 above means you have now presented a balanced position of why you stay and could leave.
5. What can I do as your manager to make working here better for you? We close by addressing the relationship between us.

By applying skills like listening, probing, and taking notes, about 90% of employees tell the truth. And when managers acknowledge, respond, and even make a few changes to day-to-day work, magic happens and employees stay longer.

Would Stay Interviews have reduced the millions of employees who left and later regretted doing so? For many millions of them, I believe the answer is, “yes.”

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.cnbc.com/2023/02/02/80percent-of-workers-who-quit-in-great-resignation-regret-it-new-survey.html

[ii] https://www.cnbc.com/2023/03/19/85-year-harvard-study-people-with-this-type-of-job-tend-to-be-the-unhappiest.html

[iii] https://www.gallup.com/workplace/232955/no-employee-benefit-no-one-talking.aspx#:~:text=Remember%20%2D%2D%20half%20of%20all,gift%20that%20keeps%20on%20giving

The post Why 80% of Quitters Regret Quitting appeared first on C-Suite Analytics.

The Obvious Doom Loop is High New Hire Turnover

That CEO was describing an everyday scenario that I heard that same day from a healthcare executive too, that recruiting candidates who stay a month and leave is like a dog chasing its tail. If you can’t increase the net number of workers because for each one that joins another one leaves, you can never…ever…increase productivity.

Recruiters being Responsible for Retention is Another Doom Loop

Maybe this is why some companies say their recruiters are responsible for recruiting and retention. That way they can interview them when they come in and then conduct a worthless exit interview when they leave. A perfect doom loop example.

Every one of us has been inundated with data about how difficult it is to recruit. Moms staying home with kids, older workers retiring early, some on the couch collecting unemployment, others holding out for more money or wanting to work from home. What has not been told, though, is the incredible number of workers who have jobs and are leaving them. And these aren’t people getting fired or laid off. These folks are quitting.

Labor Statistics Clearly Show that the Doom Loop Won’t be Fixed on Its Own

The below chart is from our Bureau of Labor Statistics that reports voluntary quits. Note the pattern, that we came out of “The Great Resignation”  and as jobs grew so did quits, too. Quits dropped some in pandemic 2020 but just by 14%. But at the end of 2022 voluntary quits are still soaring.

This is the doom loop chart. And I would bet more than half of these quits are in the first 60 days on the job with new employers.

Let’s be real. Most companies, most recruiters, and most on-the-floor operations leaders aren’t even thinking about retention. They need bodies to get work out the door, whatever type of work that is.

Can Retention Stop the Recruiting Doom Loop?

Is it possible to fix this, in these tougher-then-ever recruiting times? The answer is YES. In caps.

A major manufacturing company with nine U.S. locations faced rocketing turnover among first-line workers…the ones who push their products out the door. Our analysis pointed out that half their new hires never reached 60 days. Sound like your company?

From there we established a goal that a full 80% of new hires would see their 60^th day on the job. Goals must be accompanied by fresh-thinking solutions, though, and we put these into place:

1. First, the goal was owned by each plant’s recruiter, new-hire trainer, and all team leads and supervisors. The director of manufacturing over-ruled other local opinions by smartly pointing out that team leads are in the face of workers every day, no matter whether they are on the clock or not.
2. Next, we trained those team leads to conduct Stay Interviews and forecast how long each employee would stay…and despite the doubts of many at the top, those team leads learned to ask 5 questions, listen, probe to learn more, and solve the daily problems that frustrated their teams like shoddy equipment or others not doing their jobs.
3. The team leads conducted those Stay Interviews on each employee’s 5^th day and 30^th day…with no variance…because they knew that 80% of those new hires must reach their 60^th day.
4. While team leads bore the heaviest retention responsibility, all who owned the new hire goal met once per week to ensure they reached their 80% goal. Imagine entering a room and being handed a piece of paper with the names of every new hire in their first 60 days. These accountability teams talked through every employee’s status for staying the remaining number of days until 60…followed by discussion of a second list of those who had left.
5. The one-two punch of team leads’ building individual trust with each new hire followed by weekly team accountability sessions caused these 9 manufacturing plants to smash their 80% retention goals.

Contrast this against a new client that cannot retain new hires for 30 days…and where not one of their first-line leaders would say they know each of their employee’s names. We’ll fix that.

Stop Your Recruiting Doom Loop, Keep the Employees You Have, and Cut Your Turnover by 20% and More

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.

This article first appeared on Targeting Turnover on July 21, 2022.

The post Is Recruiting Today a Doom Loop for Tomorrow’s Turnover? appeared first on C-Suite Analytics.

So what do you predict the city of Pittsburgh will do?

A. Increase pay?

B. Increase recruiting?

C. Increase both pay & recruiting?

I’m willing to bet one mighty dollar with everyone who is reading this that the correct answer will be C, increase both pay and recruiting. Yet I doubt doing so will solve the city of Pittsburgh’s problem.

With recruiting, what new ideas might they have that they haven’t tried before? And recent data tells us a significant percentage of new hires across all industries don’t stay long.

So that leaves us with pay. When MIT issued its landmark paper on why employees are quitting during “The Great Resignation”, they said the top quit reason was “toxic corporate culture”. And that pay ranked…wait for it…16^th as the main quit reason. The authors write, “Much of the media discussion about “The Great Resignation” has focused on employee dissatisfaction with wages. How frequently and positively employees mentioned compensation, however, ranks 16th among all topics in terms of predicting employee turnover. This result is consistent with a large body of evidence that pay has only a moderate impact on employee turnover.^[ii]

I can’t tell you if pay is the 16^th-ranked reason Pittsburgh police officers are quitting their jobs, but I’ll bet you another dollar that pay is not number one…nor in the top five. 

You Can Cut Turnover by 20% or More, Even During “The Great Resignation”

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.

More Pay Is Like Suitcases Without Wheels

I don’t know how old one must be to remember trudging through airports carrying packed suitcases because suitcases then didn’t have wheels. Most of us though can remember telephone booths, putting aluminum foil on our TV antennas to get a clearer picture for the three stations we had on our black & white TVs, and…well, you get the point. Things change over time. But one thing that doesn’t change is the flawed belief that the top solution to employee turnover is more pay.

Why Pay Is The Popular Reason for Quitting

Pay is a popular quit reason because managers tell HR all the time that their best employee just quit because of pay. And getting back to the MIT study, wouldn’t you rather blame turnover on something as specific as pay rather than a turnover cause as amorphous and blame-producing as “toxic corporate culture”?

Exit interviews are another flawed practice that spotlights pay as major reason employees leave. Each year at the SHRM annual conference I ask audience members to raise their hands if their company conducts exit interviews and nearly all raise their hands. Then I ask them to leave their hands up if their company has improved retention based on the time and energy they invest in conducting exit interviews. Fewer than 5% have ever kept their arms in the air.

While some say exit interviews are autopsies, I’m certain they are only just toe-tags. Employees don’t tell the truth, reports are distributed with no follow-up actions, and if you google why employees leave, chances are great you’ll find the top answer to be “better opportunity” which tells you nothing.

Is Pay More About Money or Recognition?

Let’s agree that every employee has her price regarding leaving for more pay. Would I leave a non-exempt job for an additional $5 an hour? Maybe. Leave for an additional quarter an hour? Only if I hate my job. And the same is true for workers on every level…including executives, nurses, and even HR professionals.

But what, then, is the true value of let’s say a five percent raise? For non-exempt workers it doesn’t buy a new home, a new car, or hardly reduces the cost of the electric bill. But it does feel good to hear one’s manager tell you the performance-related reasons for the raise, to tell our families we got a raise, and to see it in our pay stubs…at least for a month or two. Or maybe a typical out-of-cycle raise just makes us feel less ripped off. 

How Did The Pandemic Impact Turnover?

The missing piece here is that the pandemic changed everything. During 2020 over two million workers retired on the spot rather than cope with losing their jobs or working jobs that inconvenienced them once the pandemic hit. Another two million workers, mostly Moms, quit to stay home with their kids when schools and day cares were closed later that year. Then millions more applied for business licenses to become entrepreneurs while others chose to drive for Uber, dog-sit, or do other on-their-own jobs that didn’t require a license.

None of these quit reasons are about pay. But they are about rejecting corporate life…or “toxic corporate culture” as stated by MIT. American workers faced a one-year time-out period like never before, causing them to adjust to market conditions and also rethink their lives. The Wall Street Journal profiled a mid-forties healthcare worker who learned during the pandemic that his highest value was taking his girls to soccer practice. So he is now an entrepreneur. Good-by corporate America.

Companies that believe retention is based on pay, benefits, or any other traditional reason are dogs chasing their tails. They will never out-pay their competition for talent…but they will irritate and lose top performers by constantly raising starting pay without addressing pay compression for others.

What Should Pittsburgh Do?

Pittsburgh should do the same thing our clients do that consistently cut turnover by 20% and more. Drive employee retention through first-line supervisors versus “things” that have little marketplace value. Train their leaders to conduct Stay Interviews, and do so in the way I invented them back in 2012. Learn what matters most in their employees’ day-to-day work and fix it. Build trust by listening, taking notes, probing to get to deeper reasons, deeper meanings, so each employee feels they can trust their leader because their leader fixes what is most important. Or if during Stay Interviews managers learn that for example police officer safety is a main reason officers are quitting, develop and fund a plan to improve it.

Do you really believe a 5% raise will improve retention six months later? Raising pay is more about providing recognition than improving an employee’s living situation. The real reason employees stay…or leave…is whether their supervisor listens and solves day-to-day issues as best they can. Our company proves that every day with our clients.

[i] https://www.post-gazette.com/news/crime-courts/2022/12/01/pittsburgh-police-officer-shortage-recruitment-public-safety-budget/stories/202212010117

[ii] https://sloanreview.mit.edu/article/toxic-culture-is-driving-the-great-resignation/

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