Turnover should be at the top of every manager’s worry list.
Employers don’t realize how expensive it is, says Jennifer Loftus, national director of Astron Solutions, a human resource and compensation consulting firm in New York City.
“They think it’s just a matter of being behind the eight ball for a couple of weeks.” But it’s far more.
Even on the conservative side, the cost of finding a replacement plus the loss of productivity while the new staffer learns the job comes to about 50% of the salary of the person leaving. So if Staffer Leaving was making $50,000 a year, the cost of hiring a replacement will be close to $25,000.
And for top management and executive levels, it can reach 100% of the previous salary.
Loftus’s company has conducted exit interviews for professional service organizations across the country to find out why people quit.
Here she gives the results of more than 10,000 responses.
I’m bored; I want a new career
Many employees leave because they want a career change, Loftus says. And they want the change because they feel stalled out where they are. The thinking is “this is all I do, so I need to find a new career.”
Once an employee decides to make a career move, that’s it. There’s not much any employer can do to stop it.
What the administrator can do, however, is prevent unnecessary career changes. That’s done by staying abreast of each person’s career satisfaction, and that’s done by taking what she terms a “pulse check” of staff. Make it part of each review. Ask
– Are you satisfied with your job?
– What are some different work activities you’d like to explore?
– What would you like to do with your career in the upcoming year?
It may be possible to give a top employee enough growth opportunity to keep that person from looking for other types of work.
I never hear one good thing
People leave when there’s no recognition for their work. Many say they left a job because management “didn’t spend enough time listening to them and didn’t make them feel special.”
To be effective, recognition has to meet two criteria.
One is frequency. Employees need to be recognized more than once a year, Loftus says. That’s particularly true of Generation X (born 1965-1981) and Generation Y (born 1981-1999). “They want constant feedback and recognition.”
The other criterion is the type of recognition. It has to be important to staff. If leaving two hours early on the last Friday of each month is important to them, they’ll appreciate it. If not, it’s no recognition at all.
What people appreciate most, she says, is a pay raise.
But from there, “it’s an open book.” There can be an employee-of-the-month award or an award for outstanding customer service. There can be a nomination process. There can be plaques, cash awards, and special parking places.
Loftus advises evaluating the recognition staff are getting now.
Draw up a list of all the recognitions staff can get and ask everybody “what interests you about this one?” and “would it be upsetting if we took it away?”
The answers are often surprising. One of her client offices, for example, decided to end the company picnics, thinking no one would care. But when it asked the employees, they said they liked the picnic and were insulted that the employer wanted to end it.
Also ask staff what other types of recognition they would like to see. Phrase the question as “what type of recognition excites and motivates you?”
I can’t work with her another day
Another leaving prompter is bad relations with coworkers.
It’s not just personal dislikes that cause the dissatisfaction but an environment where employees get bullied by their peers.
The most effective way to keep the office from falling into that culture, she says, is to emphasize the importance of treating everybody – attorneys, clients, and other staff – with honor.
Draw up a code of conduct that explains the necessity of courtesy, respect, and teamwork. It might say, for example, “We are a client-centric organization, and to achieve our goals and meet the expectations of our clients, we will work together in teams and support one another.” That prohibits all the behaviors people don’t want to see in an office – everything from rudeness to cursing to drinking on the job.
Along with that, she says, review the anti-harassment and discrimination policies with staff and at the same time make sure disciplinary action is taken against violators.
I’m sick of overtime
Work hours too are a source of dissatisfaction.
Some people complain they have to work too much
overtime while others say they don’t get enough hours. Still others say they resent seeing favoritism in the scheduling.
Loftus advises taking “an honest look at the last three months to find out who has worked what shifts and how many hours total.”
If one staffer is working overtime substantially more than everybody else, and if other staff can do the work and want the extra hours, even up the apportionment and make sure the overtime goes to the staff who want it instead of to those who don’t.
I can make over $100 more over there
Not surprisingly, employees leave for better pay. “But it’s not as large a problem as some people might think.” It’s not at the top of the list.
The most accurate way to find out if the salaries are in line with other firms and professional offices is to review salary surveys.
The most detailed surveys aren’t free. They can range from hundreds of dollars to several thousand dollars. However, good information is also available at no charge. One source is www.salary.com. Enter the position title and the office’s zip code, and salary averages appear.
Another is the United States Department of Labor at http://www.dol.gov/dol/topic/statistics/wagesearnings.htm.
And along with that is the DOL’s Bureau of Labor Statistics at http://www.bls.gov/oes/current/naics4_541100.htm.
Or Google the position and office location and many options appear.
The most telling indicator of inadequate salaries, however, is turnover. “Keep an eye on it and listen to what employees say about why they are leaving.”
What’s considered an acceptable turnover rate?
In some areas such as the hospitality industry, it’s not uncommon to have a rate of anywhere between 50% and 100%.
But in a professional office such as a law or medical practice, the rate should be no more than 15% to 20%. Thus, if the office is at 2%, it’s doing well; if it’s at 50%, salaries are probably too low.
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