Did you know: the average company loses 20-50% of its employee base each year, according to research from Bain & Company. And, based on data from Columbia University, it costs 150% of a lost employee’s yearly salary to replace them.
Retaining employees is a massive priority, but more often than not, our strategies to reduce turnover miss the mark.
Why are so many qualified employees leaving companies, and what steps can HR at fast-growing companies take to solve this problem?
This is the (multi) million dollar question. When talking about strategies to retain employees, discourse usually revolves around these three key points:
- People want purpose, autonomy, and the room and training to grow
- Employees leave managers, not companies
- Strong company culture can help retain employees
In other words, employees want to do good work for good people in a good environment. This is an oversimplification, sure, but it can be helpful to break things down into their basest elements as a jumping off point.
With these three factors in mind, here are the three key conversations you can have with employees today to learn whether or not they’re hoping to stick around, and how to make them stay.
The Good Work Talk
This conversation can be one that employees have with their HR team, or it may be more effective if they discuss this with their direct manager. HR can help facilitate these discussions by arming managers with the tools and questions that will help them get to the root of an employee’s sentiment about the work they’re doing.
It can be useful, in this case, to think about your own job and the work you do day-to-day, and ask managers to do the same. How does your work make you feel? Check all that apply:
- Impactful and helpful
- Excited about the future
- Not challenged enough
Chances are, you feel a range of emotions on a day-to-day or week-to-week basis. But when the negative ones start to outweigh or overwhelm the positive ones, we have a problem. Facilitating conversations with employees about how their work impacts their emotions outside of work can be highly informative. If they aren’t feeling challenged, maybe they need more responsibility. If they are feel overwhelmed, maybe they need some help.
Be sure that, when talking to managers and employees about this, ask open-ended questions that facilitate discussion, rather than yes-or-no questions. Instead of saying, “Do you like the work you’re doing?” Ask them, “What would your ideal day at work look like? What are you working on right now that is the most challenging to you?”
Of course, doing “good work” doesn’t mean employees get to do their favorite things every day. No one expects to love their work 100% of the time, but as long as we’re feeling like the things we do make a difference to our team, our company, or the world, we’re more likely to stick with it — as long as we also see room to grow, and have the training in place to help us get where we want to go.
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The Good People Talk
If employees are leaving because of poor management or conflicts with members of their team, it’s vital that you find out why. Having regular, open conversations with employees can help.
Employees really do leave managers, not companies. In fact, a recent Gallup study found that 50% of adults surveyed had left a job to get away from their manager. Managers have so much impact over the day-to-day employee experience, and yet for many fast-growing companies, promoting from within or hiring first-time managers can lead to inconsistencies in management style and dissatisfaction from employees.
Managers are expected to help with career development and goal-setting, build personal relationships, set priorities for the team, communicate with senior leadership, delegate effectively, give actionable feedback, and perform the technical aspects of their own role — all without significant training.
To have the Good People talk, start by opening up a transparent dialogue with your front-line managers. Ask them if they have the tools and resources they need, what challenges they may be facing, and what further professional development they’d like. Facilitating Upward Feedback Surveys (UFSs) can also be a great way to gauge which areas managers most need to improve on (Hazel can help with this!), and help you have more productive conversations and ensure they get the training they need to improve.
The Good People Talk, like the Good Work Talk, should happen more than once. Skills — especially people skills — take time and effort to cultivate, and so manager training should not be a once-a-year type of thing. Hold managers accountable for their improvement, and you’ll see engagement and retention increase in kind.
The Good Environment Talk
Author Jacob Morgan says there are actually three environments that make up the employee experience: cultural, physical, and experiential.
The cultural environment is the one you can’t physically see. It’s the “vibe” of the space, the “feeling” of working at your company. The technological environment is the tools you use, from slack to Google Docs. The physical environment is the space in which you work. Is it bright? Spacious? Loud? Open?
“I define ‘employee experience’ as an organization creating a place where people want to show up instead of assuming that people need to show up. This shift from ‘need’ to ‘want’ is the fundamental change that organizations around the world are starting to experience,” Morgan writes in this Forbes article.
When having the Good Environment talk with employees, be sure you cover all three environments. Perhaps they love the culture, but hate working in such a loud office. Or maybe they love the office, the nap rooms, and the flexibility of working from home, but they find they don’t have any of the tools and technologies they need to do their best work.
Talking to employees can also give you deep insights into any bottlenecks or inconsistencies in your culture so you can work to make them better. To do just that, social media automation company, Hootsuite, recently appointed a “Czar of Bad Systems” in order to fix just such unnecessary processes.
“In the past, these processes would’ve fallen through the cracks — they’d be cursed at but ultimately complied with. Now there’s hope that they might actually be corrected,” writes CEO Ryan Holmes in this Fast Company article.
No, your processes are not your culture, but they are a symptom of it. If your culture is one in which bureaucracy and hoop-jumping are cultivated, you’re going to turn off many qualified employees in the long term.
Rather than rules for rules’ sake, try fostering a culture of autonomy, creativity, and engagement. When we create a culture-centric organization where we think deeply about the work we do, the people we work with and for, and the environment which serves as our dynamic backdrop, everybody wins.
Work environment relates very strongly to the Good Work and Good People factors, and neglecting one can cause issues and imbalances in the others. Think of it like a Venn Diagram, where the overlap of the three circles (Good Work, Good People, Good Environment) is the Golden Area that all companies seek to occupy.
Ultimately, it’s about Push and Pull factors
When employees leave companies, it’s usually as a result of either Push Factors or Pull Factors. The Pull Factors are the things that you can’t control — the things that another company offers, like more challenging or fulfilling work, better management, or stronger culture. The Push Factors are the ones you can control: your own employee experience.
This is where exit interviews can be highly valuable, if an employee is willing to be honest with you. However, most often employees will cite the Pull Factors that are attracting them to another company rather than Push Factors that are pushing them away because they don’t want to burn bridges or offend anyone.
Still, exit interviews are, by their very nature, too late. That proverbial ship has sailed.
Where in the curve of your employee life-cycle is the inflection point, the one where people say, “That’s it, I’m out of here,” and how can you stop them before they go?
In order to find that out, you need to have the Good Work, Good People, and Good Environment conversations.