First published on HRZone.
UK employers are facing a talent shortage, which is making it harder to attract and retain employees. If your employee turnover is concerning, here’s what you need to consider to make positive changes.
Think about this: Most of us don’t start a job thinking it or the company we will work for sucks.
Yet, according to the Human Capital Benchmarking report from 2018, the overall annual staff turnover in the UK rose from 18% in 2016 to 18,5% in 2017.
Half a percentage might not sound like much, but the number is at a high and when broken down into voluntary and involuntary turnover, it’s around two thirds for people leaving on their own account (13%) against one third that are being let go (6%). In 2018, almost three in five (61%) employers reported an increase in voluntary employee turnover since the three years before (Source: https://www.insider.co.uk/news/businesses-failing-act-staff-turnover-12345924).
So, something is happening over time that makes us think about leaving our job and going elsewhere.
Of cause, we also need to look at such things like industry, interdepartmental transfers, promotions and average employee tenure. The median tenure for workers age 25 to 34 for example is 3.2 years. In addition, last year 91% of organisations struggled to find talent with the skills they require, and spent £6.3 billion on trying to patch up the holes in their workforce skills capacity (Source: Open University / HR Magazine).
Assessing the problem
Without throwing in any more numbers, some questions you need to ask when calculating your employee turnover and retention rate are:
- How many vacancies on average do you have to fill?
- How long does it take to fill them?
- What is the cost per hire?
- Do the people who left have specific characteristics that you can point out? For example, where they specifically ambitious but saw no way up? Where they mostly working in a specific department(s)? Where they mainly in middle management?
This is a test of how well you know your people!
If you are interested, this article describes the process in a lot more detail:
Some studies show that replacing entry-level positions can cost up to 40% of an employee’s salary and of course time to train. Here, an organically grown learning culture is best placed to bring employees up to speed quickly and keep developing them, which also helps with retaining that talent. You can read more about it in my blog about social learning: https://people-first.com/blog/social-learning-how-to-create-a-culture-of-learning/
Red flags to watch for
According to Reddit, a powerful social media network where users post anonymously without exposing their identity and therefore tend to be more truthful and honest, here are some red flags about (new) workplaces:
- Not listening to concerns and punishing honest feedback
- Ruling with an iron fist
- No clear goals, vague directions and having to wing it
- Obviously, a lot of people leaving but also a big gap between tenures, people that have been there a long time and newbies but nothing in between – good old boys club. If you are not one of the people that have been there for a long time, or even from when the company started, you are never going to fit in or be treated like anything but the new kid. Your ideas will not be taken seriously, and you are just there to get done what no one else wants to do and you better be doing it their way or you are going to be shown the door.
- With newer or smaller companies, be wary of “top-heavy” staff. 10 employees but 5 owners/principals? Guess where all the salary money is going.
Some sources you can investigate further:
There are not as many answers for green flags, but some are worth mentioning to take an example on:
- A job is a mutually beneficial working relationship, respect your employees’ time. Let’s be grownups together and measure performance, not hours spent in the office: ‘We give you a project and due date, and will provide tools, advice and guidance at your request. We expect updates at milestones and projects closed on time, within budget. You’re a professional (adult) and will be treated like one.’
- When the interviewer tells you in clear terms what the possibilities for advancement and raises are, and how best to succeed as an employee working for them.
- When they try to convince me that it’s a great place to work and that I want to be there, instead of treating the position like a carrot they are dangling in front of me that I should be grateful to chase.
- When you meet multiple people during your interview, and they all tell you they’ve been at the company for several years in other roles. Upward mobility is very important, across and within departments.
You can read more in this thread of the subreddit ‘AskReddit’:
Asking the right questions
So, same as someone asked thousands of people across the globe about what they would and would not like to see at their workplace, ask your employees about their values: what do they want from their job, career, colleagues, teams, the company?
Are the tools and support you offer enough?
In the race to attract and retain talent, employers need to consider their company culture and how others perceive it. Here’s how to read their responses and make the changes needed to make your organisation a great place to work.
Some good question to start with might be:
- Why did (new) employees accept your offer?
-> Did they….
… simply need money and a job?
… or see it as an opportunity and wanted to work for your company, maybe for a specific reason?
- Why did they leave the previous job? Did you ask for an honest answer to that question and honour it? Or do you already condemn them when they tell you they left because management was not capable of providing and communicating a clear strategy, because you are unsure whether you are able to and fear they will leave you for the exact same reason? If so, it is a problem your company needs to solve, not the applicant’s. All too often candidates cannot be open about the reasons for leaving a previous job, because if they had problems with the previous company, they are probably a trouble maker! We have to stop thinking that way and ask for the truth, because if you know the truth, you can make sure to set yourself apart from those companies that keep losing their talent and provide your employees with what they are craving, attract new talent and keep it in house!
(If you are interested in some extreme examples of people having to leave a job because management was not cooperative, read the book ‘Bad Blood’ by John Carreyrou, a true story about a Silicon Valley startup, or watch the associated HBO documentary ‘The Inventor’.)
- How much autonomy do your employees believe they have over their tasks and time at work? Are you asking them to be in by 9:30AM latest and they can’t leave before 5:00PM? How is that an effective use of people’s time? Everyone craves autonomy and purpose – we are all professional adults, capable of making our own decisions of how we reach our goals, we are doing so outside of work and so far we have survived. As long as we have the tools and support that we need to achieve them, we’re good and don’t need a manager constantly looking over our shoulders.
When you do an employee audit, you can find out more about what you expect from them and what you offer in return. So, ask yourself: what is your unique selling point (USP) to attract talent? It’s not benefits such as health insurance or gym memberships! Because people just get used to those and end up wanting more, they will expect it. A long list of benefits should not be your core strategy. Your core strategy should be to stop disempowering employees, so you don’t have to keep empowering them. You can use this 2 minute Employee Value Survey to get started.
Give your people autonomy and purpose, and they will be more engaged.
To help you get started, here are some tips to keep your employees in power:
- Set aside time for workers to spend on any project they want, as long as it is not related to any ongoing projects in the company. They can choose who they want to work with and how they spend that time, but also need to deliver results at the end. Many features Google offers today were born that way! You can start with 10% of the time which is just one afternoon in a full time 5-day work week and scale it up to 20% later. Either way, you will see how this converts regular down time into more productive outcomes (according to this PeopleFirst blog post https://people-first.com/blog/workplace-productivity-hacks-to-save-you-time-and-energy/, ‘on an average eight-hour workday, we spend just 2 hours and 53 minutes doing productive work.’). People might come up with new ways how communication in your organisation can be structured more effectively or how teams can become more efficient.
- Encourage peer-to-peer ‘now that’ rewards, instead of relying on ‘if, then’ rewards. ‘If, then’ rewards are typically the rewards people expect once having completed a particular task, dangled in front of them like corporate carrots similar to one of the red flag examples given by one Reddit user earlier. Same as with benefits, employees will come to expect these types of rewards and get distracted by them, so eventually performance will suffer. Example: ‘If you complete this project on time, you will get a bonus.’ The bonus will become the focus, taking away from the actual task. ‘Now that’ rewards are more spontaneous and can be awarded from colleagues to other colleagues at any time as real time rewards and feedback and rather than being handed down from management they offer recognition from peers for doing something exceptional. Example: ‘Hey, well done on completing the project on time. I hear you are now nominated for employee of the month! That is awesome!’ Because the employee did not expect the reward, they could fully focus on the task at hand.
- Take steps toward giving up control and extend freedom to people to do great work. Look into ‘ROWE’, a Results-Only Work Environment, where you provide people with clear goals, tools and support to achieve these and then let them be. Yes, that’s right, let them be. Transfer autonomy over the how, when, where and even with whom they will work and judge your employees on the results they deliver, not the time they spent at their desk.
- Play ‘Whose purpose is it anyway?’ Have your employees (anonymously) write down one sentence to answer one simple question: ‘What is our company’s purpose?’ The answer should not just be the copied purpose from your vision and mission statement, but what employees genuinely think you’re doing.
Then, collect everyone’s answers and read them out – are they similar to each other, is everyone aligned to a common purpose or are they all over the place? If there is a gap between your employees’ perception and your company’s reality, you need to close it! Because if people don’t know why they’re doing what they’re doing, how can you expect them to be motivated to do it?
In short, candidates and employees want to be treated like adults. We don’t want to have to sugar-coat our reasons for leaving earlier jobs and we don’t want to be misled about working conditions. No more ‘competitive salary’ and ‘fast paced environment’ in job descriptions, because we know this means you’ll underpay us and we will be working under a lot of pressure with the very real possibility for unpaid overtime, but we can’t complain because we knew this from the beginning.
We want clear goals (1) to work towards and the tools (2), support (3) and freedom (4) to achieve them whichever way we believe we can do best.
Because if you give us these four things and measure us on our performance, and only on that, we will have no choice but to perform – if we don’t, we risk losing our job. But if you are not providing proper training and access to information, don’t communicate clearly what you expect from us and measure us predominantly on the time we spend at our desks, we will not be able or want to give you our all.