KeenHire Blog by Margaret Graziano

What's The Impact of Unwanted Turn Over?

Well, well, well that is a deep subject. 

When I first realized that unwanted turn over was a breaking point for my staffing business it was 1995. Growing up in the staffing and recruitment business and continually hearing my peers complain, "This is just what you get when you're in this difficult, stressful business, constant turnover is the name of the game." 

While I grappled with the thought of how could an industry that is supposed to cure the staffing and retention problem have such a crippling track record of their own, I defended my situation with the best and the worst of them.

I actually believed this limiting paradigm until I met and witnessed some fabulous leaders and mentors in and outside of the staffing industry. 

Certain CEO's and Business leaders had top performers work with them, not in an equity position and not earning humongous commissions for five, ten or more years.  Who would have thought that my strong need to succeed, my tenacity and my competitive nature that had me take on mastering the fundamentals of Talent Management would lead to an entire expansion of my career and a whole new service offering for KeenHire Talent Management.

If unwanted turnover, the limited supply of peak performers, mitigating the risk of a mishire or managing an unproductive or disengaged workforce has ever kept you up at night; you will want to read on.  Your interest in learning the reasons why turnover happens as well as your ability to put systems into place that reduce these issues could be the most important facet of your Talent Strategy.

It is important to know, in 2007 & 2008, before the dip in the economy, unwanted turnover cost US companies over 3 trillion dollars. This number is astronomical and is a major cause of companies not feeling they are getting their return on their hiring investment.  Besides the raw cost of unwanted turnover, there are other hidden costs, like: loss of Stakeholder & Shareholder value, loss of customers and relationships, loss of Intellectual property, lowered employee morale and mistrust in the organization's leaders. 

I could keep going, however I think you are starting to get the picture.

Turnover is caused by several reasons, I will highlight the top 11 for you now.

1. Employee lacks passion for the company's mission, vision and purpose

2. Employee is not challenged in the position

3. Employee feels unwanted, under valued and replaceable

4. Employee feels no sense of security

5. Company hired the right resume but the wrong person for the wrong job

6. Employee took the job for the wrong reasons (i.e. it's a paycheck)

7. Employee feels there is no place to go

8. Company treats people like cogs in a wheel

9. Employee does not feel a sense of belonging

10. Employer is under-whelmed by the employees’ performance

11. Circumstances change, role changes and employee cannot adapt

 

If you want to impact retention, first know who you are. What is your Employee Value Proposition?

Why would someone, someone with great talent, great ability and a great track record choose to work for your company? Why would they choose to stay? Why will they ignore a headhunters attempt to woo them away when the deal sounds amazingly stimulating?

Second, know what the role requires. Define who the person in the role needs to be, do and produce on a daily, monthly and quarterly basis. In other words, know what the intended outcomes are and what great performance looks like. Know how that great performance is achieved and the basics for how the right person will achieve excellence in the role. Winners want to know in advance how to win the games they play. And for winners, work is another game to play and win. 

Third, train your front line people managers to treat people as people. Train them to get into their employees heads and hearts, to find out what makes them tick and what gets them going. Teach them to exploit their employees’ strengths and acknowledge their employees unique contributions to the team and the company.

Forth, talk to leadership. Ensure that the company’s top leaders are aware and awake to what is going on in the trenches. Blanchard's book Raving Fans does a fabulous job of creating awareness amongst business leaders. Employee engagement and empowerment begins with leadership awareness and continues through a deep commitment to team contribution in the accomplishing the mission. 

The bottom line is if you want to impact unwanted turnover and mitigate the risk of great people leaving, you'll want to be conscious in the development and deployment of your Talent Management business processes. Create a hiring and selection processes that brings forth the right people, for the right roles, for the right reasons. Implement an early engagement program (on-boarding) that solidifies the sale.

And lastly, employ retention strategies that honor the company mission and vision while creating alignment and demonstrate an on-going commitment to employee fulfillment. 

Nothing mentioned in this article takes an extreme capital investment, what it takes is a commitment to adopt a Talent Mindset and a commitment to make your people your competitive advantage. In all actuality not following these guidelines and not making the most of your people is a much larger risk and a much greater cost.

Some Great Books on the Subject

The War for Talent, Ed Michaels

The Impending Crisis, Hermann, Goya

The Truth About Managing People, Stephen Robbins

Top Grading, Bradford Smart

How Can You Improve Performance Metrics and Employee Productivity?

A study of the Corporate Executive Board found that since the recession began, managers have become less effective at defining employees roles and accountability. Before the recession, only 60% of employees said their managers did an okay job of effectively communicating expectations, since the recession that number has dropped to 45%, which considering is quite low.  Before, Front Line and HR Managers told employees how they fit in to the overall strategy and market share objectives, now they tell employees to get to work and be grateful they have a job.  Ouch…….that is pretty short sighted thinking.

The highly interesting part of this is that when employees understand how what they do fits into the overall strategy of the business and the achievement of their corporate objectives productivity can increase by 10% at a minimum. Ten percent of ten employees equates to an additional headcount.

When I lead my Maximize Your People ROI workshop and keynotes I speak a great deal about Jim Collins’ call to action, “Put the right people on the Bus”.  Five years ago I learned two provocative processes for assessing, evaluating & validating job specifications, at Keen we call these Benchmarking and Role Analysis.  Both of these tie Organizational Development and Recruitment processes together and drastically improve hiring metrics and recruiting success rates.

If you want to attract more of the best, you first have to truly understand why some of your employees are high performers. Is it coincidence, dumb luck or a lot of hard work when a key manager assembles a team of high performers?  Or is it a calculated and well-executed strategy?

Experts say that building a high performance work-group does not happen by anything other than a well defined, executed recruitment plan and selection hiring process. High performing teams are not created by accident.  There is always a plan of attack that attracts people with solid competencies, required behaviors, complimentary traits, and shared values.  Companies like HP create programs for this by assessing their top performers and understanding what drives their performance; aspects like competencies, motivators, behaviors, values, work style, and emotional intelligence.  They then build a hiring model that vets candidates with similar winning formulas.

This is what KeenHire refers to as benchmarking.  The Keen team has assessed over 1000 high performers conducted over 200 corporate benchmarks since our launch.  In one company alone, we saved the employer over $1,000,000.00 in poor hiring costs  Download Keenhireclarknatcasestudy because they stopped hiring people who they thought would fit and they started hiring people they knew would fit.  This new age Talent Management stuff really works!

Conducting a Role Analysis on positions that you are filling whether through an internal promotion or a new hire impacts not only your ability to put the right person on the bus, it effects your companies ability to improve workforce production and engagement. When your employees know that you chose them because they had the natural ability to do the job in a way that amplifies the companies mission and vision and they know what is expected as well as how these accomplishments impact the big picture; they are awake and aware to exactly what you are counting on them to achieve on a daily, weekly, monthly, quarterly and annual basis they are much more likely to achieve it. 

The Bottom Line is if you want a more productive, engaged workforce hire the right people for jobs they are well equipped to do, make sure they know what you expect from them and then encourage them to use their natural talents and abilities to get the job done.

If you have professional HR Management, Contract Recruitment staff or In Sourced Recruitment consultants on your team make sure they are trained in these critical hiring selection programs and strategies; if you do not and you need to go outside to Recruiting services require these service providers to offer solutions that enable you to hit your hiring and retention metrics. 

What I Love About Working With Recruitment And Staffing Businesses

Someone recently asked me why I enjoy working with staffing and recruiting people.  The answers probably have something to do with why I myself, spent 25 years as an active member of the industry.

Lets start with the industry as a whole; overall the staffing industry, temp, perm (oops direct), contract staffing and executive search all have something in common. We surround ourselves in people contact all day, every day; as an industry we have a better finger on the pulse of why people stay at companies and why people leave companies than any other industry on the planet.   We also know what the job market needs and what it wants, before the newspapers and CNN have even begun to think to ask.  Additionally we are amongst the first that feel the onset of a recession, so in some ways we are pretty astute economic fortune-tellers.  As an industry we put people to work, we give people hope, dignity and purpose.  As an industry we make new friends easily, keep friends and maintain our networks.

When I look at the people who flock to and make it in the staffing industry, I see so many commonalities, many which bring a smile to my face, some don’t and I’ll list those as well.

Most people I have met, are friends with, or have assessed all share a strong sense of urgency about their business, how they make decisions and how they serve their customers.  They also are for the most part bit on the competitive side, they like to win the games they play and the business they go after. They like a lot of action and enjoy the frenzy of the flurry of the deal or multiple deals coming in or closing at once. They know the numbers tell the story so they watch the numbers and encourage healthy activity.  They learn from their mistakes, as one can only spend so much time with the wrong candidates, clients, prospects, orders or co-workers.  They also like being evaluated on performance, the bottom line. They do or they don’t, trying is not something an experienced successful staffing person enjoys saying or hearing, especially out of their own mouth.

I would say most of my colleagues in staffing have a good sense of humor, and learn as time goes by, to find the humor in every no show, mis hire, client debacle, lost fee or candidate betrayal.  What starts out as a disappointment or angry rant typically dissipates into some long lasting joke or key lesson for future hires to laugh over and learn.

On the not so cheery side, most people in the staffing industry have a very healthy dose of Ego, with a capital E. At times that Ego, while shielding them from rejection also gets in their way of getting better, hearing the truth and making needed changes – in business and in personal relationships.  I know this because I have lived it.

And then there is the shoemakers kids, the staffing industry by far a has the worse turn over of any professional services industry. Although the BLS does not track our industry independently, most agency owners report close to a 45% turn over of established staff in tough times and 65-68% fall offs of new people hired who lack the right stuff to stay long enough to make the impact the company needed to justify the hire.  That is darn scary. Some people attribute the turn over to us making the job look too easy, because we are just so great at it, others say we adopt the practice 'place the best and hire the rest', and others say it's because we take care of ourselves and our businesses last.  

All in all, the staffing industry houses some of my favorite people, fondest memories and life long friendships, not to mention every aspect of my entire adult business life.  I am glad to be a part of it and happy that I am working with so many great new comers, established professionals and successful business leaders. In an effort to better serve our readers and customers we are asking that you click on the following link and take this Keen offerings survey. Thank you for your partnership and your support.

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