The image accompanying this post is a drawing I completed in 2024 titled “Brother and Sister.”

One of the biggest headaches that leaders of organizations face is high employee turnover. Turnover is expensive in multiple ways, from hard costs such as recruitment, and hiring temporary contract workers to costs that are harder to measure such as loss of productivity. Turnover can also generate negative momentum when open positions create greater stressors for the remaining staff that potentially snowball into further turnover if not addressed.

While estimates of the costs of turnover vary, studies have shown that it ranges from 3 to 9 months of salary for most positions to as much as two years’ salary for executive positions.  Regardless of which estimate you use, turnover is a very expensive business cost.

In dealing with turnover, most leaders try to expose the root causes so that they can establish strategies to reduce those factors and lower turnover rates. When I was in executive leadership, I tried to stratify the reasons for turnover into three buckets: personal reasons; job-related issues; and involuntary terminations. Within the category of personal reasons, I considered factors such as relocation needs, family circumstances, retirement, further education, commute issues, and health reasons. Within the category of job-related reasons were non-competitive pay, better external opportunities, work schedule, personal preferences, and the nature of work. Within the category of involuntary terminations, most were related to policy violations, absenteeism, and behavior.

In terms of acting on the root causes, I tended to believe that there was less that my organization could do about personal reasons for turnover, so most of the focus was on the other two categories.

A recent Harvard Business Review article breaks down root causes into what the authors term the “push” and “pull” of switching jobs. The authors of the article drew these conclusions based on extensive research and defined the push and pull motivations as follows. An employee feels pushed out of their current job if they have negative experiences or if life experiences change. An employee feels pulled to leave their job if they anticipate positive experiences elsewhere.

In many instances, employees are motivated by a combination of push and pull. For example, an employee could feel “pushed” if they have a negative, destructive relationship with their boss and could simultaneously feel “pulled” if a friend has referred them to a different employer with a reputation for high employee engagement.

Regardless of the reasons for turnover, there are a few principles of management that can help reduce it.

Know your data.

The best place to start is to know and understand both the turnover data and the employee engagement data. As I mentioned earlier, in my time as CEO or other executive roles, familiarity with the data was crucial. While it is important to try to categorize the reasons for turnover, there is truth to the statement that coding of the reasons for turnover is not always accurate due to the tendency of departing employees to be reluctant to give the true reasons for leaving if they feel it may burn bridges. Despite that potential weakness, it doesn’t change the fact that it is important to know the data. If there is a concentration of similar reasons, job categories, or departments, it is a sign that a deeper dive into those areas is needed. Employee engagement surveys can also highlight areas of concern as well as areas of strength. This information is very useful since it is provided anonymously and should be a true reflection of aggregate employee sentiment about the organization and its leadership. Of course, these surveys will not show the concerns of individuals, but the aggregate data helps to design strategies to address issues that have commonality among the staff. Finally, supplementing what is learned from the turnover and employee engagement data with interviews or focus groups can help provide additional color to the data.

Tighten the selection process.

Some turnover can be avoided by making better hiring decisions on the front end and improving selection is a process that should be designed with perfection as a goal, not speed. I have known of many hiring mistakes that have been made simply due to impatience and the feeling that a decision must be made between candidates that are unsatisfactory. To tighten the selection process, first the hiring manager must paint an accurate portrait of the perfect candidate, based on the purpose and requirements of the job. That portrait is then used to write or revise a job description that is specific enough to be useful. Avoid platitudes and empty statements. Then an interview instrument should be developed that should be used by all interviewers. The selection process is best done in a team approach, with as many key stakeholders represented as possible. This does not imply that it is a democratic process in which the hiring manager is bound by the opinions (or votes) provided by the interviewers. Sometimes the hiring manager will have to use their own judgment to sift through and temper opinions based on the perceived motives of the interviewers or potential blind spots that they may have.

Create an effective on-boarding process.

Statistics show that turnover is more likely for new employees than for established employees. Approximately 45 % of workers with less than one year of tenure resign, while only 8 % of workers with three years or more of tenure resign. With new hires there is typically a brief period of time to win them over to the organization and leadership and drive “stickiness.” Some strategies to effectively on board include:

  • Orientation: The orientation process should include relevant information that helps new employees succeed. Having regular feedback sessions with new employees can help to refine the effectiveness of orientation by scrapping what is not helpful and emphasizing the popular and effective aspects. It is also critical that new employees are not released too soon from their orientation period if they are not yet ready. At times in my career, I was pushed to truncate orientation shifts due to the cost of the non-productive hours. This is a perfect example of being penny wise and pound foolish and I resisted it. The cost of turnover is far greater than the cost of an additional 16 hours or so of orientation.
  • Preceptors: Many job functions need for the new employee to have an assigned preceptor to apprentice them in their new roles. It is a great comfort for new staff to know there is someone available to answer questions, make introductions, explain policies, etc. Preceptors should have formal training so that faulty practices or attitudes are not passed on.
  • Feedback: One-on-one touch-base sessions with new employees should be on the schedules of the supervising managers frequently for the first year and with senior leaders at greater intervals. These meetings, if run appropriately, can help to surface potential turnover issues so that they can be resolved.

Continue reading on this subject by going to “Reducing Employee Churn – Part 2.”