Have High Turnover? Overcoming Retention Obstacles
Wisetail | 5 min read
Turnover by the numbers
The business world has changed over the last few years. Remote work is the new normal in many sectors, and hybrid is common in most others. Employee expectations have changed as well. With millions of job openings, today’s job seekers are looking for more than just a paycheck — they want personal and professional fulfillment, a company culture they believe in, and growth and development opportunities. In light of these changes, retention has become a key focus in HR conversations.
Employee turnover statistics tell an even broader story: 31% of employees are leaving positions within the first six months, and the vast majority of employees — more than 80% — can foresee leaving their jobs in the future if circumstances are right. Strong management and transparency are crucial to employee satisfaction, resulting in a 30% improvement in retention rates. In fact, employees who rate their managers poorly are four times more likely to change jobs. Hiring standards impact retention as well. Experts consider more than 77% of voluntary turnover to be preventable, with 80% of that turnover due to poor hiring decisions. Among employees who leave their jobs, lack of career growth opportunities is cited as the No. 1 reason, with poor pay and benefits, bad culture fit, and weak management not far behind.
Retention strategy design: Metrics to consider
Turnover rates and retention rates are not always directly related, but a thoughtful strategy can address both areas of concern. A strong strategy takes these metrics into consideration:
- What is your average turnover relative to promotions and transfers? Does your organization create opportunities for employees to transfer to other areas and roles? Are workers offered a clear development path designed to keep them engaged and current on the skills they need for promotions or other movement within the company?
- What is the average turnover rate in your industry? Average separation rates vary widely by industry: While government employees’ turnover rates are typically under 20%, other areas, such as educational services (29%) and leisure and hospitality (79%), are often much higher.
- What is the average tenure of employees in your organization? Are numbers holding steady over the last several years? Note changes and trends, examine how the employee experience has evolved, and consider what factors might be driving attrition.
- Track filled positions vs. open positions. How do the numbers compare? What factors are at play in each category, and has there been a shift in time to fill?
- Break down turnover measurements into three categories: voluntary, involuntary, and high-performing employee exits. This information can provide insight into the root causes of turnover and suggest areas where your strategy needs a refresh.
- Seek employee feedback from exit interviews and surveys. Pay attention to the information you gain when employees leave, but also take time to find out why they stay. Employee feedback is a vital component of a healthy retention strategy.
Obstacles to retention: Can data help?
Of all the people-management functions your organization monitors, employee retention has the highest impact on revenue and profit margins, so investing in your retention strategy is extremely worthwhile. But a solid strategy needs more than good intentions and spreadsheets — business leaders need actionable data. The extensive use of data can help identify what is working and what’s not working. Consider these obstacles, which can be overcome with a data-driven approach:
- Your metrics are too broad. Many retention efforts look at only one turnover metric: the percentage of employees who left voluntarily the prior year. At best, this provides HR with a metric to compare to industry averages, but that’s about all. Focused, granular data offers a much more in-depth analysis, supplementing that single metric and providing insight into each of the categories of “regrettable turnover,” including high-performer turnover, critical turnover in key jobs, linchpin employee turnover, diversity turnover, turnover among poor performers, turnover among hard-to-replace employees, and preventable turnover.
- The true causes of turnover are not identified. Traditional, immediate exit interviews gather basic information, but unfortunately, that data is seldom applied systematically to develop a stronger retention strategy. Consider a different approach to the exit interview — for instance, conducting it 3-6 months after an employee has left, when they’ve had time to reflect on their overall work experience and are less concerned about their comments’ resulting in a potentially poor reference. Beyond exit interviews, also consider utilizing current-worker surveys to identify key employee motivators, frustrations, and barriers to productivity. Once major causes of turnover are identified, use that data to determine the best approach to mitigate individual causes of attrition.
- No standard processes exists to identify “flight risk” employees. No single approach has more opportunity to impact retention than pre-identifying those high-value employees most likely to quit in the near future. An effective early identification process is critical: It allows HR to focus retention efforts on specific individuals and provides enough time to mitigate issues before they become insurmountable.
- Your retention solution is too broad. An overly broad retention strategy can actually drive increased turnover, which is costlier to your business. Not all employees have the same reason(s) for leaving and applying a one-size-fits-all solution does not allow you to focus resources on those positions and employees you have identified as at risk.
- Your retention metrics are not forward-looking. Despite retention measures’ goal of improving employee stability, retention metrics themselves are often historical, focused on the previous year. Predictive metrics are extremely helpful in identifying which employees are future attrition risks, which areas are likely to experience sharp turnover increases in the near future (by job title, time of year, etc.), and whether the solutions you’ve identified are likely to mitigate those risks.
Got turnover? You are not alone. Lean into the lessons learned by the ever-changing business environment, and listen to your employees, both present and past. Finally, do not be afraid to get granular and flexible in your approach to refreshing your retention strategy. Your employees — and your bottom line — will thank you for it.
To further support your employee engagement and retention strategies, check our webinar series, Putting the Human Back in HR. This collection of virtual events aims to bring awareness, inspiration, and action to your people-centric learning and development strategies. Featuring Dr. Casey Cox, Founder of Ascend Coaching Group, learn how to build trust amongst your employees, build a reputation for retaining top talent, and learn how you actually sit on the same side of the table as your team members.