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The science of lessening employee turnover

Employee Turnover

Here’s probably the easiest place to begin on the concept of employee turnover: most people who run companies (i.e. decision-makers) don’t really give much of a crap about it. How do we know this? The idea of employee turnover and its corresponding metrics are owned by HR. Let me give this to you pretty straight: most senior decision-makers think of HR as compliance and not much else. It’s definitely not a revenue arm for them, and they don’t view the CHRO as “having a seat at the table.” In short? HR is a joke to the execs. So anything “owned” by that department is probably 90 percent lip service and 10 percent “OK, we’ll revisit this idea once a year.”

That’s the first issue.

The second issue is that most guys (predominantly men, but not always) who run companies grew into their role with a specific set of ideas. Typically, these ideas are around processes, products, services, margins, revenues, and financials. All this stuff about people? Engagement? Purpose? Mission? Most of that has only come to the fore within the last 20 years, if that. No chest-pounding workaholic who loves to bellow about his margins would ever really give two craps about people. This is where employee turnover begins to run into some issues, as well.

By the way, is it possible for a standard guy to talk about the financial aspects of their job and not sound like a douchebag? I am not sure it is possible.

Through all this muck, though, there’s one thing you need to “get:” employee turnover is important. It’s important to the bottom line. The math is a little bit murky, yes. But in general, if you lose a manager making $40,000, you can expect to pay about $30,000 to replace him. Now imagine you lose a manager making $275,000. See where this gets dicey?

Employee turnover is something we need to really be discussing. So let’s try. And we’ll bring in a little science here too.

Employee turnover: First up, why do employees leave?

The old adage is that people leave managers, not jobs. Personally, I believe that. However, the research is iffy on it. Most of what I’ve seen would say the following are the key factors for employee turnover:

Some of this is hard to figure out or work through — there’s research that good managers also create lots of turnover, for example. Nothing is perfect. But that list kind of seems like a good four-step starting place for “Hey, why does employee turnover happen in the first place?”

If you look through those four elements, the common theme (to me) is trust. Trust should be a central element of a workplace, because most jobs are made up of humans and trust is a currency for humanity. In most workplaces, though, trust is pretty absent. I think we all know this and we all secretly know why: lack of priority + constant belief that your thing you’re doing is more important than anything else. That gets to the urgency / stress / communication issues above.

If you worked at a place where you felt there was trust, you probably wouldn’t want to leave as much. You might eventually (over salary), but generally trusting environments are good, positive things. So let’s reduce employee turnover by getting more trust. But how do we do that?

Employee turnover and the science of trust

Good article on IDoneThis about the science of trust in the workplace right here. At my last job, I used to read IDoneThis stuff all the time. It got me through the muck and the mire. Godspeed, people over there.

The article talks about 2001 research from “oxytocin research icon” Paul Zak. In that specific research, he tied oxytocin boosts to “intentions of trust” being perceived. In sum, then:

Zak’s research team showed that all you need to do to get someone’s oxytocin to go up is “give someone a sign of trust.” Trusting other people means you’re there for them, but that can only happen if everyone is consistently on the same page.

Hmmm. OK. What could that mean for work and employee turnover? Let me give it back to IDoneThis quickly:

The best precursor to communication is to give people autonomy over their work. It sounds counterintuitive, but it shows employees that their managers trust them, and this sign of trust in the workplace also helps to keep people happy at work. That’s key to retaining your employees.

Alright. So, if you’re following along, here’s what is interesting. We don’t need to go all crazy giving people signs of trust everywhere. We just need to do a minimum viable product on trust, and that can help along the bonding (oxytocin), which can lessen employee turnover. Small, simple trust steps. That’s it. It’s not super duper hard.

Employee turnover: The trust excuses

Look, admittedly workplaces are not designed to be moral high grounds and/or even provide “trust” to employees. Most organizations have a “mission” (fake) and an “actual mission” (make money, get people fat-ass bonuses), and that’s it. What they “provide” to people is often debated over in magazines and on TED Talks, but none of it really matters. At least in a capitalism, the goal is money. I don’t think that would necessarily surprise anyone.




 

If you started talking to an executive about employee turnover and the need for “small signs of trust,” these are the excuses you would get back:

  • “I don’t have time for this shit. I’m dealing with my quarterly returns and the consultants.”
  • “Isn’t this an HR thing?”
  • “Trust my subordinates? But they fuck everything up!”
  • “Employee turnover? So what? We’ll hire some new peeps at a cheaper salary!”
  • “This is all fluffy people stuff. We’re revenue dragon-slayers up here!”
  • “I’ll trust those buffoons when I see the margin ROI on their salary, baby!”

All bluster and corresponding bullshit, which happens with every people issue out there. Employee engagement is all BS. If you have an employee recognition program, it’s caked in excuses. 

Ever stop and realize that because we lip-service these things, employee turnover goes up?

So can we reduce employee turnover?

To an extent, yes. But to an extent, no. If you scroll up and see “opportunities for growth,” that means “more money” to a lot of people. The only real way to make more money in the modern age is to job-hop. HR views this as a stigma — that’s another example of how out of touch HR commonly is — but in reality, most companies want to suppress your salary and give more to the big dogs. So, if you want to make more money, you need to be a big dog. But you’ll never get there at one place anymore unless you’re an absolute superstar with a good sense of the politics. You gotta job-hop, and that’s going to drive up employee turnover.

But let’s say you work at a small enterprise company selling widgets. You want to reduce employee turnover. Can you? Why yes. Start with small signs of trust. Here are a few examples:

  • Let an employee work from home for a week
  • Offer some employees 20 percent time to work on something outside their standard deliverables
  • Hand a project to a low-level employee and say “Run with it and show me what you’ve got”
  • Let other team members run and organize some meetings

Show people you trust them, and they’ll enjoy working there more. That’s science. If they enjoy working there more, that’s reduced employee turnover. Not rocket science, but often missed in a crush of day-to-day tasks and assumptions.

Your take on employee turnover — and reducing it?

Ted Bauer

6 Comments

  1. “Employee turnover? So what? We’ll hire some new peeps at a cheaper salary!”

    In my experience, this line of thinking is all too widespread in the workforce, and sadly incredibly short-sighted.

    What’s really odious is when people believe this AND fault folks for job-hopping, all the while having the gall to call themselves a manager.

  2. Trust is demonstrated by how fairly and reasonably a manager deals with problems and errors that employees cause or share with them. Trust is also built when managers work for employees by helping them fix and prevent their mistakes. When a manager works constructively with an employee and protects them from their own errors they build trust. “Work for the employee”.

  3. No chest-pounding workaholic who loves to bellow about his margins would ever really give two craps about people…….so very true. Very good article Ted. Accurate insight as always.

  4. Get rid of the one higher up toxic employee who creates hell for all employees, so they transfer out. It’s been this way at a certain retail pharmacy store. Just a hostile bitch and they can’t keep staff due to her.

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