Understanding & Leveraging Attrition

Sadly, attrition is part of business life and as mentioned in my previous article, seeking 100% retention or 0% attrition is virtually impossible. Our human attitudes are as unique as snowflakes, therefore thinking we can address every issue is not only unrealistic but also damaging to company profitability, revenue and sustainability.

Of course, there are various forms of attrition, voluntary and involuntary. Voluntary is the primary focus of this article but involuntary is the termination of employees based on a strategic change in direction or shear panic due to a poor financial picture.

The common thread is that one or more people leave the company and that equals attrition. There are also some industries where attrition is a necessary part of the operation. However, that is a topic for another article.

If you are the CEO and looking to make your company legendary then this article is a great starting point. If, however, you are looking to generate a quick sale of the company and bail then you will find this article annoying. Sorry for being so blunt but it is true.

Legendary companies say; What would happen, for example, if we viewed attrition as part of the inevitable cycle of life and began to accept it and use it to make our companies better, more responsive and flexible?

This is not only doable but really the best way to deal with engagement and culture within our enterprises. By focusing on being intentional and proactive can build an empowered workforce that can become brand ambassadors and well-balanced individuals.

Our employees quit for numerous reasons. Some of these, unfortunately, leaders will have little to no control over or even a positive impact. For example, an employee may quit to follow a spouse who had taken a transfer to a new location or they need to say at home due to needs of being a caregiver or parent. These life events are tough for any leader because they occur outside of the work environment, in the private lives of the individuals

However, there are many reasons where people quit that leaders can have a very positive and effective impact on. The key here is whether the leader recognizes the steps necessary to create a positive environment and support the changes necessary.

Now a quick search of the Internet will reveal a plethora of lists of why people will quit, some have as few as three while others will be in the double-digit area. Below are six that I feel are critical for any small or medium-sized company to focus on. I have combined some and eliminated others so we get down to workable areas of leadership where you can have the most impact, when done well.

Here are my 6 critical reasons why employees quit their job. You can manage them.

1. Poor relationship with boss or co-workers

Too many people believe that the boss is elevated and therefore there is no relationship and this is false. While employees don’t need to be best buds or BFF’s with their boss or leadership, however they must have a relationship. Leaders are such an integral part of their daily lives at work that they cannot afford to have an uncomfortable relationship.

The leader provides direction and feedback, spends time in one-to-one meetings, and hopefully connects the employee to the larger organization. To have a toxic relationship with the person an employee reports to undermines the employee’s engagement, confidence, performance, and commitment.

It is well documented that a bad boss is also the number one reason why employees quit their job Finding ways to empower these relationships is critical to company success.

Now the same is true when it comes to disputes between co-workers. If the organization is built on secretive silos with a highly competitive attitude between the respective organizations, I can well guarantee that many of the internal relationships will be toxic if not total disengagement.

Research from the Gallup organization has always indicated that one of the 12 factors that indicates whether an employee is happy on their job is having a best friend at work. Relationships with coworkers retains employees. Leaders must notice and intervene if problems exist.

People will seek out a new culture if they feel they are threatened or smothered by someone else or another team so this should be avoided in all situations. Look around your organization and see if you have encouraged this type of culture. Team competition can be great if done well and rewarded fairly but too many are based on self-satisfaction rather than team satisfaction so it turns sour quickly. Attrition will occur!

2. They are underutilized and/or bored

I don’t know anyone who wants to be bored and unchallenged by their work. Now in some instances this may be a factor of the job, sitting at a help desk waiting for calls to come in comes to mind here.

If you notice that you have an employee who acts as if he or she is bored, you need to help them find their passion or provide a way for them to be empowered to do something creative with their wait time.

Employees want to enjoy their job. Each week they spend roughly 30% of their 168 hours each week working, getting ready for work, and transporting themselves to work so they need to have a motivation to continue.

I highly recommend that you work closely with employees who report to you to ensure that each employee is empowered, engaged, excited, and challenged to contribute, create, and perform. If you can’t find some alternatives, you will lose them to an employer who will. Attrition will occur!

3. Not understanding your companies position on pay in your industry​

When someone loves to work for your company and believes in your business they can still be tempted to change, if there is a better offer laid on the table. Too many times I find leaders are blind to how, when and who is trying to recruit their workforce, especially if they are perceived as being engaged and valuable. Being aware is key to understanding attrition potential within your company.

Highly suggest you keep tabs on your competition, not only from a product or service perspective, but also in terms of what their offerings are in terms of total compensation, not just salary.

Personally, I was upset if someone is not trying to hire away my talent. This is what used to keep me on my toes on a regular basis. Most of the time I could avert the attrition but I did lose a few and that was always a time of celebration for them and us.

You want to create a culture where individuals moving on to a different or better situation should be celebrated. Every email that is sent to the entire company, to say good-bye, should include a comment about passionate coworkers who the employee cares about and will miss. The coworkers with whom a person sits, interacts, and serves with on teams, are critical components of an employee’s work environment and need to be informed and supported.

I also include employee recognition in this point. While recognition is important, it is not generally among employees’ primary concerns. However, do you know what your competition is doing in this regard?

A lack of recognition can affect many of these factors, especially culture, but it’s probably not the deciding factor in an employee’s decision to leave your organization. It resides in benefits, which are usually down played yet influence decisions.

Personally, I have always found that a lot of genuine appreciation and recognition provides the icing on the cake when it comes to avoiding attrition and improving retention.

While recognition may seem to be subtle, it can help you retain your best employees. Recognition helps support employee engagement, culture and employee self-worth. I suggest you make recognition part of your organization’s DNA to keep your best talent.

4. Lack of opportunities to use skills and abilities

Whenever employees can or even better are empowered to use their significant skills and abilities on the job, they feel a sense of pride, accomplishment, and self-confidence.

They are participating in activities that they are good at and that stretches their skills and abilities even further. These skills may change as your company grows so it is also wise to be mindful or where you are in the vision and mission of your growth strategy and make sure you have profiles of the best employee candidate for each growth segment. This will help you with employee development as well as new recruitment.

I would highly recommend you bring in a coach to help you with developing a career path plan for your company. Learn to maximize your employees’ talents. Happy employees mean happy customers, better employee engagement and subsequently better revenues and profits.

Employees want to develop and grow their skills. If they feel there is no growth in your company then they’ll find one where they can. This includes opportunity. If an employee can’t see a path to continued growth in their current organization, they are likely to look elsewhere for a career development or promotion opportunity. Make sure that you’re talking with them and that you know their hopes and dreams.

5. Lack of empowerment, autonomy and independence

Organizations have been talking about empowerment, autonomy, and independence, for decades now but they still don’t realize that they are not something that you can do to people or give them. They are really traits, habits, and characteristics that an employee needs to pursue and embrace.

As the leader, you are responsible for the work environment that enables them to do this. They are responsible for doing it. They need encouragement and tools to do it but even more importantly they need to be empowered to fail and learn.

It has been pointed out that by creating a culture of accountability, you create empowerment as employees own and execute their responsibilities. Without this, your best employees will leave.

Let your employees genuinely feel they are contributing to the big picture, vision and mission of the company whenever you can.

Share mistakes with people so everyone can learn from them without feeling judged.

Never lose site of the day to day operation of your business, get down in the trenches at least 4 times per year. This is the only way you will know if they are truly engaged.

It is critical for all the other leaders to be engaged. As I mentioned in a previous article when even one person shirks their responsibility to being engaged, there will be chinks in your armor and things will never be the same. This means that people must be unified not uniform.

6. Poor perception of Organization’s financial and cultural stability

Financial instability: represented by actual or rumored lack of sales, layoffs or reduced work hours, salary freezes, successful competitors highlighted in the news, bad press, employee turnover, mergers and acquiring companies, all lead to an employee’s feeling of instability and a lack of trust.

Employees who are worried tend to leave. In my mind, you must make every change and potential change transparent. Always let the people know how the business is doing and what the organization’s plans are for staying on track or recovering in the future. Failure is not fatal unless you fail to get up and try again.

The overall culture of your company makes a huge difference for employees. Does your organization appreciate employees, treat them with respect, and provide compensation, benefits, and perks that demonstrate respect and caring?

Is your work environment for people conducive to employee satisfaction and engagement? Do you provide events, employee activities, celebrations, and team building efforts that make employees feel that your organization is a great place to work?

But, the most important issue here is the employees’ trust in and respect for the management team. If they respect your judgment, direction, and decision-making, they will stay. If not, they will leave. After all, they have the financial stability of their families to consider when they decide which executive they will follow — or not.

Four High Impact Areas to Support Growth

Here are four high impact ways you can address the reasons noted above. While these are simply stated that are very difficult to initiate, sustain and improve over time for various reasons like shareholder or financial demands, both of which are external.

1. Nurture open, transparent, honest and frequent communications.

Employees appreciate a workplace in which communication is transparent, management is accessible, executives are approachable and respected, and direction is clear, concise, and understood. Your overall culture keeps employees — or turns them away. It will get you what you want and need for success?

Provide multiple forms of communications among leaders, employees and teams through All Hands meetings, 1 on 1’s, informal walk arounds, and having a true open-door policy.

Train your leadership to have thoughtful and coach like conversations so that you are always aware of what is going on within the workforce. Building your managers into coaches will change the whole dynamic of your firm because the attitude becomes one of we versus me or I.

2. Maximize the empowerment of your employees to participate, engage and contribute to company success.

By empowering your people to experiment, fail and learn you are setting the stage for significant growth and stability. Innovation and change will be your friend not your enemy.

Generally, engaged employees have many characteristics in common:

· They love to be challenged at work.

· They are great at productivity and delivery

· They excel at solving and documenting solutions for issues and problems.

· They proactively share information with whomever is necessary to accomplish the goal.

· They love to support each other when in a time crunch.

· They love to continuously learn and advance.

Learning to maximize and leverage this type of engagement is pure joy and makes your life as a leader fulfilling and rewarding.

3. Proactively manage and develop your workforce ensuring the right people in the right position at the right time. This is not a one time and done exercise.

Be proactive in employee relations and ensure that all your leaders understand the supreme importance of this activity. Create opportunities for all your leaders to spend time discussing goals, sharing success stories, sharing failures as learning objects and providing feedback to the organization that reinforces the vision, mission and values.

Build on this platform by blending growth and development opportunities into your employee’s portfolio. Yes, this takes time but it is well worth the investment if the role is critical to your business.

Use special projects, expanded roles or cross-training exercises to accomplish this blending, Take the time to evaluate all departments once a year to ensure you have the right people, skills and temperament to accomplish the revised vision, mission or values of your company

4. Stay on top of your influence in your industry in terms of compensation packages and other benefits.

Highly recommend that you annually review your complete compensation packages and compare them to your competition. If you don’t know how to do this, outsource it, just make sure you are willing to listen to and implement the recommendations.

Summary

If you pay attention to these 6 factors and the 4 high impact areas, you will reduce turnover and retain your most wanted employees. If not, you’ll be holding regular exit interviews and good-bye lunches. It’s expensive to recruit a new employee. Why not expend the effort necessary to retain the employees that you have methodically and strategically recruited and hired?

If you are looking for ways to implement any of these types if plans please check out my website at http://tlgcoach.com or call me at 630–454–4821.

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Ron McIntyre

Ron McIntyre

Ron McIntyre is a Leadership Anthropologist, Author, and Consultant, who, in semi-retirement, is looking to help people who really want to make a difference.