Given the Costs of Recruitment, How do I Reduce Turnover?

Turnover is the total number of separations of employees from your department during a given time period. This question raises a more basic question: "What makes most employees leave their jobs? Many managers will tell you that the reason is that the employee can make more money elsewhere, but the truth is, money is rarely the only motivator and it may not even be the primary motivator in most cases.

Yes, unless a company keeps its salary levels fair, it cannot expect to keep employees for any significant length of time, at least not the good ones. But as companies learn during boom times, retention isn’t achieved solely by throwing money at employees. Studies show that employees leave for many reasons, and a poor relationship with their manager is a major one. In his book Love ‘Em or Lose ‘Em: Getting Good People to Stay (San Francisco: BarrettKoehler, 1999), authors Sharon Jordan-Evans and Beverly L. Kaye observed, "People don’t quit companies, they quit bosses." Evidence has shown a high correlation between employee job satisfaction and the relationship between the employee and direct manager.

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Research suggests that it isn’t a single factor or initiative that can keep an employee with a company. Rather it is satisfaction with many factors, including:

  • Fairness at work: fair pay, performance evaluations and corporate policies.
  • Care and concern: career development opportunities and family-friendly benefits.
  • Satisfaction with day-to-day activities.
  • Corporate reputation: an employer with a strong, capable management team that is financially sound and does high-quality work.
  • Work and job resources: the people and equipment to do the work.

Employees want open communication between themselves and management and the opportunity to gain new skills. They also want work that is fun, interesting, and exciting. In addition, many of today’s workers want to work in an environment with leading-edge technology.

As a manager, you can personally influence the turnover within your organization by watching out for the following:

Not carefully assessing the job or applicant. All too often, we idealize a job, hoping to lure a potential candidate on board. Similarly, we frequently aim for credentials that sound impressive but have little to do with what the employee really needs to do the job. In short, people are hired on false pretenses—offered quick advancement and varied assignments even when this will not be the case. When a job candidate discovers the truth, he or she may remain for awhile but, in time, he or she may begin to search for another job.

Not orienting new employees. Once an employee takes the job, is he or she left to flounder? If so, he or she may find adjustment more difficult—prompting belief that the grass might be greener elsewhere. People need to know how things work in their new employer and, if there is a problem, who they can turn to for help.

Providing little or no training. We can all stand to learn. But for the new employee, or any employee with a change in responsibilities, training is critical. If you don’t offer this training or training that offers increased employability, then you’re setting up your employees for frustration and failure.

Not clarifying goals. Too often, employees are overwhelmed by conflicting demands or infuriated by requirements that appear only when it’s too late to incorporate them into their work. People have to know their responsibilities and the priorities that affect them. Have you told your employees? Stop and ask them what they think the priorities are—you may be surprised. If they aren’t clear, take the time so that there’s no confusion.

Offering unclear or conflicting instructions. Don’t assume employees will do the job according to your expectations. Make sure you have told them the parameters to which they must adhere.

Providing no feedback. Employees want to know when they’re doing well and want to receive helpful redirection when they’re not. You are the major source of that feedback.

Overlooking morale problems. As one manager erroneously said, "Morale isn’t my job—getting the work out is." In fact, how that work gets out depends on morale—and the manager who either doesn’t notice problems or (worse yet) notices but does nothing isn’t doing his or her job. Failure to correct morale problems is a sure way to raise turnover.

Being on the defensive. Do you welcome suggestions? Are mistakes accepted or are employees constantly chastised? Managers who encourage openness and support their employees create a more productive environment.

Being unsupportive of creative thinking. Turnover is a problem in those departments where creativity and new ideas by employees are discouraged because it upsets the status quo.

Limiting rewards to a paycheck. When we think of rewards, we think of money, but requests for more money often stem from a desire for recognition. Further, money has limited motivational value, and since managers have limited control over this reward, it is important that they know how to use other types of rewards. For example, participation in decision making, training opportunities, chances for choice assignments and travel, and attendance at key department meetings are all rewards that can be used to reinforce positive performance time and time again at very little cost.