by Bob Gershberg, CEO/Managing Partner, Wray Executive Search
Lost productivity, customer dissatisfaction, reduced business, exit expenses, recruiting, interviewing, hiring, training and orientation; the long list of turnover costs has been drilled into our heads for decades. Cost estimates of losing an employee range from 30% of annual salary for entry level to 400% for executive level. I have written about and preached the value of solid retention programs often over the years. During tight talent pool periods we all focus on retention. The truth is turnover can be good, very good in fact, for performance driven companies. A workforce filled with under-performers and stale managers is far costlier than the expense associated with the recruitment and training of fresh, ambitious individuals.
Rather than a general drive to minimize turnover, we are well served to retain our top performers, strengthen our mediocre performers and oust our weakest performers. We must create innovative retention systems. Do not reward managers for keeping turnover low but only for keeping it low for the top and middle level performers. There should be no retention goal set for the bottom 20%.
Turnover, whether voluntary or involuntary, allows for the introduction of new talent, fresh skill sets, the reset of compensation levels, greater inclusion and the repositioning of human capital to align with the current customer base. Further, it creates opportunity and upward mobility for the remaining team members. Turnover too, yields positive outcome when a weak performer is replaced by a superstar.
We must identify top performers and ensure that performance management processes and metrics return actionable data. An overreliance on annual performance reviews, for example, may yield skewed, inaccurate or incomplete information on an employee’s year-over-year performance. Relying on additional metrics and information, such as that attainable through peer-to-peer feedback mechanisms and more frequent check-ins, management will have access to more reliable data regarding performance and output. Ongoing communication is critical; once a year at an annual review is not enough.
Well-crafted retention programs start with the talent acquisition phase. Make certain your hiring authorities engage in behavioral interviewing. This type of interview focuses on a candidate’s behavior when faced with a workplace challenge to gain insight into a candidate’s strengths and priorities. Determine a candidate’s career aspirations and motivations. Where does the candidate actually want to be in five years? Dream job? Great cultural match?
An organization’s onboarding program serves as an introduction to the company. It is crucial that a new hire is provided with everything that she/he needs to succeed. Providing coaching or mentoring opportunities will aid in communicating business goals and priorities, and may provide a window into the new hire’s future career path within the organization.
Empower and trust the folks you hire. Be loyal and transparent. Loyalty abets loyalty. Trust abets trust. A culture rich with these attributes will allow for enhanced engagement, productivity and retention. Empower your people to succeed and delegate authority as appropriate. Allow and encourage them to soar and they will!
All the best,
Bob Gershberg |CEO|Managing Partner|
(888) 875-9993 ext 102
Finding tomorrow’s leaders today!
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