My colleague and friend Leigh Branham has reported his latest findings on why good employees leave. The full report can be found today at our web site Re-EngageBook.com.
The summary clearly shows that the vast majority of employee turnover is largely within the control of company leadership and direct line supervisor. Leigh summarizes the study:
- Most Turnover is Avoidable. The vast majority of respondents–94%– report leaving for push reasons than for pull reasons–only 6%. These percentages are almost exactly the same as those reported in my analysis of post-exit data from the Saratoga Institute in The 7 Hidden Reasons Employees Leave (AMACOM, 2005). These more recent findings add still more evidence that most turnover is at least potentially preventable if there is a commitment to re-engage and keep the individual. Of course, we may not care to avoid some turnover, though it may be avoidable.
- Trust in Senior Leaders: The #1 Reason…But Why? The most-cited reason for leaving was lack of trust in senior leaders. This may surprise some and certainly runs counter to conventional wisdom that employees leave managers–usually interpreted as one’s immediate boss. However, this finding confirms the conclusion Mark Hirschfeld and I presented in our analysis of 2.1 million engagement surveys from 10,000 employers, as described in Re-Engage (McGraw-Hill, 2010)–that caring, competent, and trustworthy senior leadership is the number one driver of employee engagement. We believe this may be related to the events of the past 10 years–the fall from grace of many CEO found guilty of malfeasance, reports of disproportionate CEO compensation, and the greed of Wall Street senior executives before and after the financial collapse of 2008. CEOs, who were considered innocent until proven guilty, are now considered by many guilty until proven innocent. This generalized distrust may be having a dual and counterintuitive effect–increasing employee cynicism while at the same time raising expectations of CEO behavior at our own employers.
- Pay is A Significant Push Factor For Some. Insufficient pay was the second most-cited reason for leaving and continues to be a “dissatisfier” that causes some employees to move on. Actually, as you may have noticed, three of the 39 reasons are pay-related. When we add reasons #17 (Pay not based on performance) and #19 (Unfair pay practices), the percentage that selected pay-related reasons becomes 10.4%, still second to senior leadership, but a significant root cause for many. Note that reasons #17 and #19 have more to do with dissatisfaction with the way pay is determined, not the amount of pay per se–an important distinction. Keep in mind also that respondents were asked to cite up to five reasons for leaving, so that pay may not be the number one reason, but one among a handful of others.
- Leaders and Managers Can Prevent the Push Factors. Reason #3–Unhealthy/undesirable culture–is mostly influenced by the values, mindsets, and standards of senior leaders, but also by managers who must be counted on to uphold the cultural values and people practices. Most of the remaining push factors in the list can be influenced and prevented by the actions of both senior leaders, managers, and supervisors. “Lack of work/life balance”, for example, is influenced by staffing/budget decisions and work/life policies made at the most senior levels, but also by the daily decisions of direct managers about granting time off to care for sick children and family emergencies, etc.
For additional information, please check out Leigh’s web site: Keeping The People.
From Talent Management, a study that reports high potential employees may still change jobs in spite of the recession:
High-potential employees aren’t afraid to strike out for greater opportunities despite the continuing recession, according to a study of how the best and brightest of high-potential talent have weathered the global recession over the past 18 months. The report released by Catalyst, “Opportunity or Setback? High Potential Women and Men During Economic Crisis,” offers an overview of the current workplace and recommends that even during international economic instability, employee retention must remain a foremost concern for businesses.
The article continues:
Overall, this study demonstrated that high potential women and men are successfully working through the recession with continued choices in employment and prospects for growth. Talent managers who view the economy as an opportunity to scale down on retention efforts should seriously reconsider in light of these surprising findings.
Our research confirms this point. We see many talented employees who are “sullen and near mutinous”, who are not being led in a way that gives them confidence in their current employer. Many are willing to take the calculated risk to find a place where they can grow and be recognized for contributing to a business that won’t ignore them.
A fews years from now we will fondly remember some businesses who hit the scrap heap and say “too bad they couldn’t hang on to their best and brightest– it might have made a difference.
This Associated Press article features Leigh Branham, my co-author, talking about the importance of employee retention for small businesses:
Many employees of small businesses are grateful to have a job, even as salaries are frozen or cut and they’re asked to take on more responsibility. Company owners shouldn’t take those good attitudes for granted — they need to show workers some loyalty so staffers don’t jump ship when the economy gets stronger.
“This is a crucial time,” said Leigh Branham, owner of Keeping The People, a human resources consulting firm in Overland Park, Kan. “Employees are testing you to see how loyal you are to them, to decide if they’re going to stay.”
The article presents several excellent ideas for keeping employees in these more difficult times.
Hopefully, you’ll read the article, manage accordingly, and “pass the test”.
Yet another survey, this time from People Management, points to how badly most employers go about force reductions:
As half of UK businesses consider making redundancies within months, the damaging effect on morale has been highlighted by a CIPD survey of 3,000 employees. The YouGov survey found that 70 per cent of employees said redundancies had damaged morale, with 22 per cent so unhappy about how redundancies were being handled that they were looking to change jobs as soon as the labour market improved. Just over a quarter said they were less motivated as a result of redundancies.
Some 81 per cent believed senior managers needed to restore or improve trust in their leadership, as only a quarter said that they were consulted on important decisions. Just over half of employees said frequent and honest communications would have the greatest impact on improving trust. Public outrage at “rewards for failure” was also reflected in the survey, as 29 per cent said not rewarding failing senior managers was key to rebuilding trust.
Ben Willmott, CIPD senior adviser, public policy, said: “Survivors of redundancy programmes left ‘punch drunk’ by the process may not have the levels of motivation and commitment needed for their employers to capitalise on any recovery. Many disillusioned employees will vote with their feet and leave as soon as the labour market picks up.
Terribly sad, really. By leaving employees “sucker punched”, leaders risk losing those employees who survive the layoff. In the employee engagement surveys we’ve analyzed for our book Re-Engage!, we see many employees who are, to coin a phrase, “sullen and near mutinous.
I’m pleased so see that my co-author, Leigh Branham, is still getting press about his book on employee retention. A recent citation was from HR.BLR.com shares the results of his extensive research into this area, which is still timely today:
Employees leave organizations for many reasons; oftentimes these reasons are unknown to their employers. Employers need to listen to employees’ needs and implement retention strategies to make employees feel valued and engaged in order to keep them. These retention methods can have a significant and positive impact on an organization’s turnover rate. Here we’ll take a look at some of these strategies.
According to strategic planning consultant Leigh Branham, SPHR, 88% of employees leave their jobs for reasons other than pay: However, 70% of managers think employees leave mainly for pay-related reasons. Branham says there are seven main reasons why employees leave a company:
- Employees feel the job or workplace is not what they expected.
- There is a mismatch between the job and person.
- There is too little coaching and feedback.
- There are too few growth and advancement opportunities.
- Employees feel devalued and unrecognized.
- Employees feel stress from overwork and have a work/life imbalance.
- There is a loss of trust and confidence in senior leaders.
The book, The Seven Hidden Reasons Employees Leave, is terrific. Worth looking at now– even in the midst of an economic crisis– because keeping our best is more important right now.
Very good article today at TheStar.com about taking care of employees through the transition period to economic recovery. The article states:
And even though it could take up to two years for a real labour market revival, it would be a mistake for companies to assume they have the upper hand over their staff. In fact, businesses should be taking action now to ensure their best workers remain engaged, says Terry Power, president of staffing firm Randstad Canada.
“When you’re in a recession, the trend typically becomes one of `do more with less.’ And inevitably that means a little more stress on your people,” Power said.
“The people in those situations that tend to step up and do the most for you … are your best people. And often times, though, that gets kind of taken for granted.”
That means managers should not simply assume their star employees are coping well with weighty issues such as heavier workloads or the loss of colleagues through layoffs. Although many businesses are squeezing their staff through painful cost controls right now, good quality companies will also take the initiative to provide some sort of longer-term payoff – even if it is not a cash-based reward.
This is the time to invest in your people. I know the economy is a challenge for many businesses, but there are creative ways we can help our associates grow and know they are valued. The employers that engage their employees now will have a much better chance of coming out of this recession with those valued employee still on board instead of working for the competition.
So goes the headline from an article in Workforce Management. The article presents these results:
The research my colleague Leigh Branham and I have conducted suggest that maintaining employee benefits in these difficult economic times is an important contributor to maintaining employee engagement. It’s nice to see that most employers are trying to hold the line, at least when it comes to retirement benefits.
A survey of 505 employers shows 74 percent have not changed the amount they contribute to their workers’ 401(k) retirement accounts in the last 12 months, and they are not planning to do so in the future. Another 6 percent are considering a decrease, while 3 percent have eliminated the match and another 2 percent have decreased it. On the other hand, 6 percent of respondents are weighing an increase in the match.
I just returned from working with my co-author Leigh Branham at an event where we judged employers on how “family friendly” they were. The event allowed us to review employee survey data on the topic and interview leaders and employees of participating companies.
One employer particularly impressed me with their willingness to be flexible when it came to allowing employees to attend to family needs. There was little resistence to reasonable requests to time off, even at the last moment. I was told a story of how a valued employee was given a day off before a big customer event the next day when the business would likely be quite busy– the manager didn’t seem to even break a sweat about the matter. As you might expect, employees were genuinely appreciative of the committment of the management, and little was reported in terms of employees taking advantage or “gaming”– most employees were grateful for the kindness and returned the consideration with increased productivity and retention.
That’s all fine and well, but what really struck me was how much effort had gone into the results I was observing. The ability to be flexible was the outcome of years of great management. A few observations:
- The ability of management to be flexible to employee requests required that many employees had been cross-trained for different roles in the business.
- Employee turnover was very low. You can cross-train employees more effectively in a stable workforce.
- The philosophy of the leadership in this business was to trust employees. If there were performance problems those would certainly be addressed, but giving trust to employees brought trust back many-fold.
Some managers may like the idea of being more family-friendly and have a desire in accommodating the personal needs of those whom they manage. To effectively implement a concept may require years of carefully designed management– time to get to work.
The online Insurance Journal showcases a company, Texas Mutual, that was one of ten companies recently recognized for their wellness programs.
Our research continues to show concern on the part of an employer for the well being of employees to be a significant driver of overall employee enagagement. Developing and implementing a wellness program is only one way an employer might show care and concern for this engagement driver, but we think it’s an important effort in this category.
I’m pleased that my new employer, the Silverstone Group, actively promotes wellness in the workplace. I’ve already seen the benefits of their efforts up front and personal. I encouage all employers to seriously consider wellness as a key component of their overall engagement strategy. Besides, the cost-benefit to an employer, regardless of impact on employee engagement, is more than worth the effort.
(Graphic courtesy of www.lumaxart.com)
A report published in Business Week shows an opportunity waiting for business to seize right now– underutilized talent:
According to a winter 2008 Accenture (ACN) survey, which BusinessWeek has an exclusive first look at, 46% of women and 49% of men worldwide believe they are insufficiently challenged in their jobs.
“What this means for companies is that they have a huge opportunity with the talent they own to get more return [out of these] same people, if they just know how to ask them and how to engage them,” says Armelle Carminati, Managing Director of Human Capital and Diversity at Accenture. “Your employees are eager to do more. They are capable of doing more. They want to do more. This is a great competitive advantage for you as a company because you don’t have to hire new talent in a challenging environment—you have the talent in place.”
- How could you more effectively engage the talent of associates where you work?
- By not doing so, do you risk losing them to a competitor who will?