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July 9, 2014

Reduce Employee Turnover in 10 Steps

Are you losing valuable employees?  There are two types of turnover that concern HR professionals and CEOs – voluntary turnover where people quit, and involuntary turnover where you fire people. Your total turnover is a combination of both. Should you only be concerned about voluntary turnover? Or should you also be concerned about those who left because they were fired? The answer is you should be concerned about both because both, if excessive, is a sign that there are problems with your management.

reduce-employee-turnoverLet’s take voluntary turnover first. Why are people leaving your company? What is your benchmark? Are more people leaving this year than left the year before? What is the industry standard? Are they going to a competitor for more money? (Let’s hope so, because you can fix this.) Or are they leaving because they hate their supervisor?

According to Jeff Kortes in his article, “No Nonsense Retention”, in the May 2013 issue of HR Professionals Magazine, 75% of people say the worst thing about their job is their boss. How can you find out if this is the case in your organization? What do your exit interviews say? By the way, your exit interviews are only valid if a third party handles them. Most employees will not provide honest feedback about their boss even when they are leaving the company because they fear getting a bad reference. You can prevent some turnover by implementing 360-degree feedback evaluations on all management. You can turn around poor managers with proper coaching and training. 

What about involuntary turnover – those who were fired? There is good involuntary turnover and there is bad involuntary turnover. Obviously, we all want to get rid of the bad guys, those who aren’t performing; or those who don’t follow the rules and could be a legal liability; and those who just don’t fit the culture. However, if you research all your involuntary terminations, you will find that not all involuntary terminations were appropriate or necessary.

Make sure that a seasoned HR professional witnesses every termination. If this is not possible, then the employee should be suspended with pay until a seasoned HR professional is available to witness the termination even if it’s by phone. If someone is being fired for poor performance, ensure that they received the tools they needed to succeed whether it is the proper “in house” or “on the job” training, or off campus classroom training. Also, make sure that their most recent performance evaluation reflects the reason they are being fired. No one should be fired for poor performance if they have an excellent performance review. Don’t set yourself up for an EEOC charge because the employee did not receive the proper training to do the job.

Before you set out to reduce turnover in your organization, make sure that your CEO wants to reduce turnover. Many CEOs actually want a certain percentage of turnover in order to keep payroll expense as low as possible. So before you embark on reducing turnover in your organization, find out your CEO’s philosophy on turnover. You should also know whether your CEO feels that turnover is an HR responsibility or a management responsibility. I have always felt that it is a manager’s responsibility to retain his employees, rather than HR’s responsibility. However, CEOs have different philosophies on this. It is HR’s responsibility to produce the metrics on turnover and make recommendations to reduce employee turnover. However, it is up to the manager to prevent turnover. (in my opinion) 

Now that we have defined turnover and figured out who is responsible for it, what can be done to reduce it? reduce_turnoverHere is an outline to help reduce employee turnover in 10 steps:

  1. Ensure that your pay is competitive.
  2. Ensure that you are recruiting the right people for the right job.
  3. Ensure that all employees are recognized for outstanding performance.
  4. Ensure that all employees are given the tools to succeed.
  5. Ensure that all supervisors are properly trained on discrimination and sexual harassment.
  6. Ensure that HR is involved in all terminations and that people are treated with respect and dignity.
  7. Ensure that 360-degree feedback surveys are completed on managers annually and follow up on them.
  8. Ensure that employees are given a say in their specific job responsibilities.
  9. Ensure that an employee satisfaction survey is completed on a regular basis; at least every other year - and share the results with employees.
  10. Ensure that a third party vendor handles your exit interviews. 

Good managers know it is important to build relationships with their direct reports. Remember no one cares how much you know until they know how much care. Simply being a sincere and caring manager will prevent a lot of turnover.




Cynthia Thompson, MBA, SPHR, SHRM-SCP

Cynthia Y. Thompson is Principal and Founder of The Thompson HR Firm, a human resources consulting company in Memphis, TN. She is a senior human resources executive with more than twenty years of human resources experience concentrated in publicly traded companies. She is also the Publisher/Editor of HR Professionals...

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