Commentary: Stop the Bleeding in Staff Turnover

by Clark A. Ingram

Many companies struggle with how to get the desired results from their greatest asset: people. The first action to begin proactively managing this asset is to stop the bleeding—stop turnover.

There is an analogy in medicine. When treating a medical trauma, the priority is to determine if the patient is bleeding, and if so, identify the source of the blood. Other issues are a distant second, because if the bleeding is not brought under control, the patient dies.

In organizations, it is clear if you have employee turnover. What is less clear though is what that turnover is costing your organization.

You can find no-cost employee turnover calculators online, which will help you get a handle on the cost of the churn. You may be surprised. Relatively small businesses of 250 employees can be spending in excess of $1 million a year, every year. That does not include the cost of business opportunities which you forego because of your turnover. These lost revenues can be many times more than the the price tag on turnover.

If the cost alarms you and you want to stop the bleeding, your next step is to determine the root causes of the turnover. Some of the most common reasons employees leave are:

  • Disrespectful and difficult bosses;
  • Lack of opportunities;
  • Lack of professional development;
  • Favoritism.

There are infinitely more reasons than that, and every employer has causes specific to its organization. It is a mistake for employers to look at other organizations and assume their causes for turnover are the same. You will lose time and money chasing the wrong causes.

Before you begin the work of identifying your causes, clarify for your organization the difference between a symptom and a cause.

A symptom points to the cause; employees will offer symptoms. Compensation, for example, is a symptom, although it is reported as a cause.

Brace yourself. It is more difficult to address causes than the problems that emerge from those causes (the symptoms), but the work is worth it.

Your payroll system can be a useful tool to start. It will give you objective facts. Focus on the departments that have high turnover. When talking to the managers of those departments, however, take what they say with a healthy dose of skepticism. Their explanations often are indirect slaps at departing employees.

Exit interviews are an easy tool, but they are mostly unreliable. Most departing employees are not candid about why they are leaving. They are going to tell you what they think you want to hear.

Engagement surveys can also be a good source if they are anonymous. If the employees do not feel secure, then they are no better than exit interviews.

Good managers will know the real reason someone is leaving. They have a communication system in place to gather these facts. Good managers often know the reasons employees in other departments are leaving as well.

In your typical department, there will be at least one employee who knows exactly why someone resigned. This is the best source of information. A communication system developed to reach these employees is invaluable. The higher in the organization the employees are communicating and feel secure, the better.

Management is now getting good objective information straight from frontline people. It is more reliable than information filtered by managers or individual agendas. This collection of information will help you define your root causes.

Clark A. Ingram is the founder and president of People Profits, LLC. People Profits is a financially focused human capital consulting firm. The firm specializes in helping clients in the three biggest issues confronting organizations: employee turnover, chronically open positions and the skills gap.