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Employee attrition has a “quick fix”

Employee Attrition

Some — not a ton — more attention being paid recently to employee attrition, i.e. turnover. Written about employee turnover a couple of times, including the science of lessening it and something called “The Hawthorne Effect.” It’s interesting stuff. More people should care about these issues around employee attrition and turnover, and by “more people” in this context I mean “executives” — oh, wait, “senior decision-makers.” There are obviously a couple of major problems in this area, though:

Well, you should care about turnover and employee attrition. There is some legitimate research that less turnover can help the bottom line. (I’ve also mentioned this, in this post.)

What if preventing employee attrition had a quick fix? What if it was easier than we thought?

Prevent employee attrition: Some McKinsey research

Nice report here from McKinsey on people analytics and “issues HR is getting wrong,” including this:

Too often, companies seek to win the talent war by throwing ever more money into the mix. One example was a major US insurer that had been facing high attrition rates; it first sought, with minimal success, to offer bonuses to managers and employees who opted to remain. Then the company got smarter. It gathered data to help create profiles of at-risk workers; the intelligence included a range of information such as demographic profile, professional and educational background, performance ratings, and, yes, levels of compensation. By applying sophisticated data analytics, a key finding rose to the fore: employees in smaller teams, with longer periods between promotions and with lower-performing managers, were more likely to leave.

I’d say this is a pretty crucial paragraph. First off, it addresses the biggest concern of executives — cost. “I don’t want to spend money to retain the middle ranks,” an executive snarls. “I want that money getting me and my wife to Saint Lucia, baby!” Unfortunately, the only way most organizations know how to solve any problem is toss money at it. (That’s also the only way most families know how to solve a problem in the middle class ranks, naitch.) And then — A HA! — look what this company does: they use data! DATA! IT’S THE FUTURE! (Well, mostly.)

And what did they find? Exactly what you’d expect. Employee attrition comes from terrible managers and people who aren’t getting rewarded for the work they do.

So what’s the quick fix?

It’s not per se quick, but the general idea is this. Let’s get better managers. How about we promote less assholes?

This seems like a gargantuan task. Let’s try to make heads or tails of it:

In short, we’re going to train up managers — improve the front line leadership — and make them value-add. And I bet what happens next is: lowered employee attrition.

But don’t good managers also cause turnover?

Of course. But it’s the good kind of turnover. People are advancing in their careers. Hell, they may even be taking on more responsibility for your company. (Internal recruitment!) It’s always hard to see someone leave a role they were good at, because it might mean more legit work for the manager, but …

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Good managers create the kind of turnover that makes you say “Awwww, that employee is growing.” Bad managers create the kind of turnover that makes you want to put a shotgun to your genitals. Ever heard of a PIP?

So it ain’t rocket science on employee attrition

You want less of it? Train up your managers so they do something of value. Most of the paper-pushing they do all day could probably be handled within a CRM and be much more effective. They need to be much more. In the simplest terms, they need to actually manage. That, and respecting employees + providing them a few perks or opportunities, is going to lower employee attrition.

Ted Bauer

3 Comments

  1. “Well, you should care about turnover and employee attrition. There is some legitimate research that less turnover can help the bottom line. (I’ve also mentioned this, in this post.)”

    I mean, if nothing else, for parity’s sake, the same people who would chastise you for “job-hopping” on the grounds that it costs a company money need to understand it’s a two-way street. From what I’ve seen, these chastisers also assume ignorance of the turnover-costing-money notion on the part of those who would switch jobs, when often they harbor a lot of ignorance about WHY people leave jobs.

    I also like your idea about requiring managers to develop employee recognition programs and tying bonuses to retention rates. Sales staff have to work to earn commission; those responsible for overseeing the professional lives of others ought to be held responsible in a similar fashion.

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