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Turnover Reduction: A Complex (but Achievable) Goal

May 26, 2016
iStock-1070990852 - turnover

Turnover is a pain point for organizations across all industries, occupations, and locations. The reason being that losing employees (especially well-qualified ones) is associated with devastating costs to organizations. There are obvious and tangible costs associated with losing an employee including:

  • Separations costs (HR staff time to conduct exit interviews, temporary coverage, paying remaining employees overtime to cover for the lost employee, hiring temporary workers)

Replacement costs (HR staff and managers’ time spent sifting through resumes and conducting interviews, advertising for the open position, training the new employee, socialization of the new employee, and productivity loss while the new employee is getting up to speed)

In addition to these tangible costs, there are other intangible costs that are often not as obvious or easy to calculate. Some of these include:

  • Added stress on remaining employees to cover the work of the departing individual

  • Safety of other employees may be at risk if they are working a man/woman down

  • Teamwork can be disrupted after losing a coworker

  • Client loss

  • Snowball effect – turnover becomes contagious

Turnover’s importance is not only limited to the costly effects of a departing employee, but is becoming increasingly relevant in today’s current labor environment. Specifically, as the unemployment rate continues to drop, it provides more alternative employment options to employees. Also, as technology continues to advance, access to these alternatives becomes increasingly easier to gain. When jobs are readily available AND they are easy to access, it’s no surprise that organizations are beginning to see a spike in turnover rates. It is more difficult for employers of choice to maintain that status; as such, they are searching for interventions to keep their talent.

So what is driving turnover? There isn’t one clear answer to this question. Rather, turnover is a very complex phenomenon and is often the result of multiple factors. Those factors differ from organization to organization, which is why turnover is so difficult to target, predict, and ultimately reduce. However, if you are able to determine which factors are driving turnover at your organization you have a much better shot at implementing successful interventions.

Some would argue that simply implementing an assessment to measure individual traits that are theorized to be related to turnover will solve the issue. In some cases, this method alone is successful, but other times this is not the case. It is similar to saying that a person’s behavior is completely dependent on their genetic makeup.

We all know that environmental influences also play a big role in how we behave. Therefore, the organization’s culture and the job environment (along with many other job/organizational factors) are also expected to impact how likely someone is to leave or stay. If you work for an organization that offers great pay, benefits, and is a fun place to work, you may not have much room for improvement on the cultural front, so an assessment may be the most effective tool to implement. However, if you are at an organization that has a great selection process, but is lacking some of the perks, you may be best suited to target an environmental or cultural intervention.

During a webinar on June 7, two of Select International’s turnover experts will discuss the topic of turnover in much greater depth. An overview of the numerous turnover drivers will be presented and descriptions of how these drivers impact turnover will be provided. Additionally, we will be sharing a few case studies of organizations that we have worked that have implemented various turnover interventions – we will discuss what worked, what didn’t, and why. Finally, strategies for identifying and rectifying the most crucial turnover drivers in your organization will be provided.

It is possible to reduce turnover – you just have to make sure you are taking the most appropriate steps to do so for YOUR organization.

hiring for cultural fit

Alli Besl, Ph.D. Alli Besl, Ph.D. was a Research Consultant based in the Pittsburgh office of PSI. Her areas of expertise include: employee turnover, selection and recruitment.