How To 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:

• HR typically “owns” employee attrition numbers, and execs don’t commonly care about HR

• 41% of global employees essentially have one foot out the door each day, and yet companies are still reporting healthy growth. So why would an executive care about turnover? Show me my products and processes, baby! Those make me my bonus!

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 & Company 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:

• First: care about training people. It matters.

• Then: we need to train managers more than anyone. We often forget this.

• And now: when we train, we need to remove all outdated assumptions about “what makes a good manager” from the training.

• We instead need to train about people development and human energy.

• There needs to be sections on priority development and strategic alignment.

• Managers should be forced to explain how they spend each day of the week.

• If they’re predominantly working on low-value tasks, this needs to be corrected. It’s costing you money.

• Each manager should be forced to draft a low-cost employee recognition program and explain how they’ll measure employee engagement on their team.

• The incentive structures for these managers should be tied equally to “hitting KPIs” and being good managers. In other words, if you have a huge turnover rate, your bonus is smaller — because that turnover rate cost the company money, and now they’re taking that money from you.

• All managers should be required to complete several classes on communication in the workplace.

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 …

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.