Turnover is expensive.
Turnover costs companies anywhere from 16% to over 300% of annual salary (for the highly skilled—the ones most likely to leave). Companies lose productivity, valuable organizational memory, relationships, and often intellectual property. Critical activities stall and die while searching for new talent.
What’s more, nearly 20% of employees will voluntarily quit their job this year. You read that right: 20%. Why? With mortgages to pay, kids to clothe and put through college, and stuff to buy, what makes a person so fed up that they quit?
The fact is that to a very large degree your relationship with your people is the difference between whether people stay or go. That’s what makes leadership such a tough gig. You are the glue.
What can we do to stop the turnover madness?
In order to stop the turnover madness, we must take a step back. We must acknowledge that leadership evolves as people evolve. Chris Edmonds wrote an interesting article in SmartBrief that points to evolution of the workforce:
“What motivated employees 20 or 30 years ago doesn’t inspire today’s millennial workers. Attracting and retaining talented employees—and keeping them engaged and inspired—requires creativity, experimentation with benefits and work structure, and more.”
While I mostly agree with Edmonds’ advice, there’s one point I must make.
When I teach about managing multi-generational workforces I am a bit of a contrarian. One of the first points that I make is to stop putting workers into generational boxes (like Chris and nearly everyone else does these days). Here is my point: Everyone wants to be challenged, engaged, respected, and valued. It’s not a generational thing.
But to Edmond’s point, there is one quality that younger people share today that may make retaining them more challenging than retaining older employees. They aren’t afraid to leave.
Again, I don’t think this is necessarily a “Millennial” thing (baby boomers are leaving jobs too), but younger workers have way more information (thanks Internet!) and have fewer obligations to keep them stuck in one place. They aren’t afraid to let their life be in limbo for a bit. They’re willing to bet on themselves. For example, only 16% of millennials cite their career ambitions as having anything to do with climbing a corporate ladder. Meanwhile, 66% report starting their own business as their ultimate goal. This confidence and fearlessness has paid off (literally) for many. CNBC reported in June that “nearly a quarter of U.S. millionaires are millennials.”
Our challenge, then, is to create a workplace where all workers, young and old, feel like they are being fulfilled and making progress on their goals. We want them to stay. We want to have confidence that our investment in them is an investment into our organization.
The challenge is that now we’re dealing with a growing workforce (young and old) that is less likely to keep a job just because they need a job, the way generations before them did. they have more information. And more options. In a way, it’s a good thing. They’re forcing us to look at issues that need resolved for all of our team members, not just the younger generation.
What do our employees really want?
Here are four places to start.
- They want a nice work-life balance. Today, that means more flexibility in their schedules. It means days off to attend field trips or to volunteer their time to someone or something in need. It means working remotely when it’s appropriate. Mostly, it means you learning what matters to your team members individually and doing your best to make it work with their job duties.
- They want good relationships with colleagues. People say this all the time, but it’s true. During the week, we spend more time with our coworkers than we do with our families. If there are power plays going on, you need to clarify roles. If there is a lack of communication between departments, you need to find a way to team build and or streamline processes. Often, your employees won’t come to you with their frustrations. They don’t want to come off like they’re just complaining. For leaders, that means we must take the time to be present with our team and with the emotions of the office. Don’t assume that just because no one is coming to you everything is fine.
- They want to give back. People want to help others and serve their communities, find their place in the world. They want to feel like their place in your organization serves a bigger purpose. Never forget to communicate the bigger mission of your company. Do it as often as you can. And get involved in community projects. At our office, we do things like adopting the mile stretch of road in front of our building. Once a quarter, we throw on orange vests and get out in the fresh air to do some good. We also participate in a Christmas tree donation to needy families. Sure, these endeavors cost some time when the team could be head down in “work” stuff. But the boost in morale that comes with them far outweighs the time lost on the grind.
- They want respect. This one is a no brainer, but somehow we forget it. Being “higher up the ladder” than someone doesn’t make you better. Often, these signs of disrespect are unintentional. But be mindful of power’s effect on you. It’s a sneaky devil. Remember that a leader’s job is to serve the people inside the building. Not the other way around. Do that, and your organization will flourish. Your people will be content.
My last bit of advice for leaders who want to reduce turnover. Focus on yourself. Your actions. How you communicate with your team. How you support your team. How you serve them. Be the reason they want to stay.
Employees of Approachable Leaders are 72% less likely to quit their jobs. Learn more about how to turnaround your turnover rates by signing up for our webinar next week on the 3 Silent Killers of Companies. Click here.