Your Turnover Problems Are About To Get Much Worse

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Author David Towler
Date Published June 28, 2013
Original Publication COD Website

A recent international study found that global turnover rates are on the rise and will become a serious problem for employers over the next five years.

Global economic growth is predicted to start to recover within the next 24 months. As growth returns, job markets will revive and staff turnover will increase. According to the research, by 2018 more than 190 million employees worldwide (approximately 23.4%) will leave their current employer. This problem will begin in emerging markets (India/Mexico/China) and will spike between 2014 and 2018 in mature markets (North America/Europe).

Keeping the employees that you already have is much cheaper than the costs associated with the recruiting and training of replacements.

This information begs two questions:

1. Why do employees leave?
2. What can you do about it?

The study examined more than 5.5 million employees worldwide comparing ‘stayers’ and ‘leavers’ and identified five retention factors that drive employee commitment.

1. Confidence In The Organization And Its Leadership
Almost four in ten employees (38%) have concerns about their Company’s direction and a third (31%) expressed a lack of confidence in their senior management team. Employees need to have a sense of stability and confidence in their Company and in how well it is being managed. Owners need to ensure that their vision and corporate goals are well communicated and that the message is consistent.

2. Room For Growth
When employees are worried about the longevity of their employment, they begin to look for other opportunities. Organizations that fail to provide opportunities for growth and development risk higher turnover rates and increased recruitment and training costs; often while contending with increasingly smaller budgets. Well over a third of those studied reported that they wanted more educational and developmental opportunities and more support from their leaders in order to facilitate it.

3. A Fair Exchange
As organizations are frequently trying to do more with less it’s easy to forget to provide concrete expressions of how much employees are valued. Employees need to know that they will be recognized, appreciated and rewarded if they are expected to deliver their best efforts. The study found that almost 50% of employees don’t believe that they’re adequately recognized or appreciated by their employers.

4. An Environment For Success
An effective work environment involves more than just teamwork and motivation. Employees want to be proud of their work and this requires that they be able to do their jobs effectively. This means having a tightly run ship that has efficient operating procedures combined with having the right people in the correct roles. Competitive environments fail while collaborative ones succeed. Almost half of employees (40%) think that their organizations aren’t well run.

5. Authority And Influence
Employees who are allowed to do their jobs and influence how they perform them, are happier, more engaged, more productive and consequently, much less likely to fly the coop. To achieve this, manage must provide more flexibility, fewer rules and less micro-mangement. Your employees are your in-house experts. They can tell you how they can be more efficient; and they want to – if you are willing to listen to them. Many organizations have already achieved this because most employees (69%) state that they have the autonomy that they need in order to perform well. A slightly lower percentage (66%) believe that their organizations foster an atmosphere of creativity and innovation.

Before job markets begin to improve, savvy organizations will want to give some serious thought to whether they are addressing these factors now, as well as, how to be proactive rather than reactive in the future.

So what should employers be doing to insulate themselves from future trends and minimize the impact of negative ones? The research identified 5 things that employers should be doing.

1. Provide Clarity
Communication and trust go hand in hand. The corporate goals and direction must be clearly communicated, explaining why they exist and how they will be achieved. Employees need to understand what their roles will be and how they will be affected by changes. Middle management must consistently reinforce the message with authority and provide incentives for the projects or actions that are required in order to achieve the Company’s goals.

2. Instill Confidence
All managers need to model behaviour that instills confidence in the organization’s leadership. This includes their directions, leadership style and how they communicate. In order to do so, leaders need to understand their own leadership style, its impact on others and where they need to acquire additional skills or develop existing ones. Studies have consistently shown that the managerial behaviour accounts for 70% of how working climates are perceived by employees. If employees think that their working environment is poor, it is often the management team that is identified as the root cause.

3. Encourage Development
Rather than providing training only at certain times in people’s careers, employers should foster a nurturing environment where learning is an ongoing process. Explain the career paths to follow, your advancement procedures, job expectations and skill requirements and then provide appropriate opportunities for people to advance. Offer people chances to learn new skills by taking on additional responsibilities in their current jobs and coach them to take on new roles.

4. Foster Enablement
Your employees are your greatest resource and their success is your success. Providing them with the support that they need to perform well and the influence required to make improvements will help them to help you. It’s a win-win situation. Involve employees in the decision-making process and build commitment through consensus. Encouraging creativity and innovation allows people to practice problem-solving without fear of reprisal.

5. Rewards & Recognition
Study after study has shown that remuneration is not how employees usually gauge satisfaction with their jobs. Individuals who are well paid but who are frustrated, stressed, overworked or who must contend with hostile work environments, are not happy employees and are much more likely to leave. Although there’s more pressure to ensure that pay is competitive in the market, it’s not always realistic or possible to meet these expectations. Be transparent about your reward structures and policies. Remind employees of other, less tangible rewards that they receive (including benefits) since most employees think only of salaries and bonuses when considering the adequacy of their remuneration.

All of this sounds relatively simple but acting before you’ve gotten your ducks in a row can be imprudent or worse, might exacerbate any problems that already exist. Knowing what’s needed the most is important in order to make the most of your available resources. Asking your employees for their input is the easiest way of obtaining this information and allows you to focus your efforts effectively.

Employee surveys are an excellent way to collect accurate, detailed information that can be measured and acted upon immediately or in the future. However, creating and conducting the analysis on your own can be time consuming and common pitfalls can be difficult to avoid. Using the services of survey professionals is often far more cost effective and usually garners much higher participation rates than trying to do so in-house. Self-service, online surveying platforms usually leave all of the design, administration and analysis to you. Hiring a professional surveying firm will streamline the process, ensure that it’s done properly and quickly and also provide you with expert analysis of the data. This also lets you capitalize upon their expertise while allowing you to concentrate on doing what you do best. Best of all, a survey professional will be able to pinpoint where problems exist and provide specific recommendations to address them.

In addition to surveying your organization, there are hundreds of inexpensive, reliable and accurate assessment tools (tests) available to help identify people’s strengths, weaknesses and training needs. If your employees express dissatisfaction with management, you have an opportunity to assess the skills of your leaders, help identify where they need improvement and provide the appropriate coaching or development opportunities. 360-degree assessments that reveal managers how others view them are an extremely effective way to identify development needs, as well as, foster inter-departmental communication and improve team work.

There are also many tools available that are specifically designed to identify how employees feel about how they’re recognized for their performance and more importantly, that allow them tell you what they want but aren’t currently receiving. Finally, one of the best ways to avoid turnover problems in the future is to hire employees with a low turnover risk from the outset. Many pre-screening tools exist that will help to identify individuals who are more likely to remain with you after they are hired.

Creative Organizational Design specializes in customized employee attitude surveys and carries over 1500 employee assessment tools that can help organizations make better hiring decisions, discover where problems exist or determine where development opportunities are need the most. Some of our most popular titles are listed below and our website contains detailed information on 100’s of testing tools for all kinds of applications.

The Reid Report – helps identify job applicants with high levels of integrity who are likely to become productive employees.

The STAY Inventory - looks at factors within the individual that contribute to first year turnover such as, laziness, uncooperativeness, susceptibility to stress, lack of concern for company rules, resistance to supervision, lack of respect for a steady job.

The Management Aptitude Test - helps evaluate critical thinking skills which are typically relevant to management positions, including the ability to make smart business decisions, analyze and solve situational problems, monitor a budget and supervise and communicate effectively with others.

The Recognition Practices Inventory – identifies the reality as to what employees prefer and perceive regarding recognition behaviors of their managers. It allows you to identify and prioritize gaps between what employees want from their leaders and what they actually get.

The Teamwork - Knowledge, Skills, Attitude - measures the likelihood of success of individuals in a team setting. It can be used for selection and for promotion or training purposes.

We would be happy to help you find the right products for your needs or survey your entire organization and recommend where and how to make the necessary changes. Please contact us for more information about our survey services or any of our assessment solutions.

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