Careers

It’s normal to have employees leave your business on occasion. People often need to leave due to relocation, familial responsibilities, and other life events that may be completely unrelated to your business. However, if your employee turnover rate (calculated as the percentage of employees who leave in a given time frame) has begun to skyrocket, you likely have a problem.

The financial cost of a high turnover rate can be substantial, with some estimates exceeding $4,100 per hourly employee or as many as 9 months of a salaried employee’s pay. Worse, you’ll need to spend additional time focused on hiring and your employees often wind up shouldering the additional responsibilities and stress of fewer employees. To combat high turnover, however, you’ll need to find out why so many of your employees are leaving.

Why Do Employees Leave?

A high turnover rate can be indicative of a number of issues within your organization. Though these issues can – and do – vary by industry, there are multiple common factors most businesses with high turnover rates share. We’ve compiled a list of the top major causes of employee loss and what you can do to remedy them:

1. Employees feel burned out. A recent survey by Asana found 82% of employees felt overworked and burned out. Even if these employees don’t choose to leave your organization, overwork can lead to increased absenteeism and declining productivity. To fix it, pinpoint the cause of overwork, whether it’s understaffing, poor training, or volume; then, determine if you need to increase hiring efforts or simply offer help to struggling employees.
2. Employees feel unengaged or unchallenged. Sometimes, employees experience the opposite effect – a lack of challenging work or even a disconnect with the purpose behind their work. If your employees don’t feel their work has meaning for your organization or feel their skill set is underused, they may seek employment somewhere that engages and appreciates them more. Check-in with employees frequently to assess their level of engagement with their current duties and recognize achievements as they occur.
3. Negative workplace culture. While culture can be a difficult aspect to nail down, it’s at its most apparent when it’s driving your employees away. If your culture doesn’t fit your employees, morale will dip, current talent will leave, and new hires won’t last. Actively address signs that your workplace culture is veering toward the negative, re-evaluate the way you and other managers engage with staff, and endeavor to truly listen to each and every employee and their concerns.
4. Hiring ill-fitting employees. Poorly matched employees can come in many forms – sometimes they just don’t mesh with your existing culture. Sometimes, employees don’t have the skills, drive, or personality fit necessary to be successful on the job. If your employee selection process doesn’t include fully validated measurement tools customized for each job, you are missing an opportunity to maximize employee fit for each role.

Turnover rates don’t have to damage your bottom line. Making changes to the way you handle your current employees as well as search for and screen for qualified hires can help you find and retain employees who will do their best work for your business. On many occasions we have seen motivated clients reduce turnover by 75% or more in a matter of months. It’s not easy, but it’s well worth the effort.

Resources:
https://www.shrm.org/about-shrm/press-room/press-releases/pages/human-capital-benchmarking-report.aspx
https://www.dailypay.com/business-resources/employee-retention-rate/
https://www.shrm.org/resourcesandtools/tools-and-samples/how-to-guides/pages/determineturnoverrate.aspx
https://smallbiztrends.com/2019/08/small-business-burnout.html

Here you are, in need of help. Someone left a key role to move to another position elsewhere, there was an unfortunate sickness, or you earned a big new client. Or, you may have become aware of a gap or opportunity, and you want to find just the right person—or people—to join the team.

When the decision to search for new employees is made, or made for you, you probably don’t want to spend a lot of time or effort on HOW you hire; you just plain want to HIRE!

However, you do know that the cost of a “wrong” hire is huge. Each “failed” employee search costs tangible major dollars in training, lost productivity, and time to fill…not to mention intangible costs such as low morale, lost opportunities, and the toll on your employer brand. It’s scary when a new employee “transforms” into an adversary soon after you put in the effort to find and train them to be in your world. So, what can you do to find a better match right away? That person who, in all of their forms, is just right for the job? Do you have to learn and apply new terms and buzz phrases to find your new “heroes?”

One term we intuitively use at SDS and help our clients use by working with us is “transferable skills.” Sometimes you’ll hear “transformative skills.”

These are “buzz phrases”…but a buzz often starts when something has impact. There are many interpretations and definitions out there for transferable skills. Here’s one simple definition I like from www.businessdictionary.com:

“Aptitude and knowledge acquired through personal experience such as schooling, jobs, classes, hobbies, sports etc. Basically, any talent developed and able to be used in future employment.”

Most hiring managers agonize when thinking they should consider these skills as they’re searching for that “needle in a haystack” perfect new employee who can do anything. They build lists of potential transferable skills, look online, research endless job descriptions, and honestly, go in circles. If you Google the phrase, you’ll see career coaching lists helping people build transferable skills, lists of military to civilian transferable skills, and countless ways to help people understand how to better search for a match which leverages a potential employee’s different work and life experiences.

Sounds difficult and exhausting, doesn’t it? To think of, and figure out how to search for, the transferable skills which might work for your crucial role can be time consuming, inexact, and worrisome.

Another way to consider and cover transferable skills is through customized talent science. If you work with a system, like ours at SDS, which has been capturing and leveraging transferable skills for over 15 years, you’re all set.

The concept of transferable skills allows for a person’s aptitude, behaviors, and outlook to factor in to their probability of being successful in certain jobs. It’s a little bit like that phrase “wherever you go, there you are.”

By including transferable skills, you are able to cast a much wider net when recruiting, which dramatically increases your odds of finding the right person. It widens your candidate pool! One of the problems we often encounter at SDS is companies getting too focused on finding a person with the exact experience they are seeking, and, as a result, they end up excluding many people who actually have the ability to do a great job for them. They actually narrow their pool and miss out on high potential candidates, simply because some work histories don’t precisely fit what they were expecting to see.

At SDS, we have many examples of helping companies hire people who, at first glance, appear to have no business even applying…but after assessing for their specific transferrable skills, we learned that these individuals could succeed in the jobs. Some of the most successful operators our oil refinery clients have hired actually had their main work experience in surprising areas such as the fast food industry.

The takeaway here is that many terms in the world of talent seem more complicated than they really are. Transferable skills are assets almost any applicant will possess—if you customize how you look for and understand them. We take care of that by working closely with you on what you DO know—your business—and using what we know to apply the talent science which “highlights the human” in human resources, and applying the full-spectrum talent fit that includes transferable skills.

Cars that turn into warriors, or villains, need not apply.

Companies routinely use “prior work experience” as a significant factor when recruiting and hiring new employees. A look at any job posting board will no doubt show that most jobs require candidates to possess a minimum number of “years of experience” to even be considered for employment.

Recently, however, this practice has come under fire. Many are now suggesting that experience is overrated, and that companies place too much weight on experience when searching for job candidates.

These folks often point to the fact that many of today’s most successful companies were started by individuals who had little to no experience at the time of start-up (e.g. Bill Gates, Steve Jobs, Mark Zuckerberg, to name a few). They also suggest that advantages of not relying on “experience” when hiring includes: (a) the need for diversity on teams, (b) experienced hires often need to unlearn the bad habits that they might have acquired over the years, (c) it is not as expensive to hire people who have less experience, and (d) experience from one company doesn’t always generalize to other companies.

At some level, I agree with these points. I would argue, however, that for most jobs, experience plays a role in who is likely to succeed. The problem is that by only looking at someone’s basic job history you are not likely to gain much insight into how that experience translates to on-the-job success. You need to dig a lot deeper than that.

JOB TENURE DOES NOT EQUAL JOB SKILLS

Just because someone has spent many years working in a job, it does not necessarily mean that that individual has acquired the skills and work habits that you might expect. Consider two candidates applying for a maintenance mechanic job. Candidate A has seven years of experience working at a manufacturing plant. Candidate B has two years of experience working at a chemical processing plant. An initial review of these candidates’ qualifications might very well assume that Candidate A is more qualified for the job than Candidate B, based on the fact that Candidate A has more years of experience in the maintenance mechanic field.

However, “years of experience” is often an inaccurate measure of relevant experience. Instead, you need to consider multiple factors when evaluating these candidates. Some of these factors might include:

Breadth of Experience

Number of years in a job does not always equate to breadth of experience. For example, let’s assume that even though Candidate A has been a maintenance mechanic for seven years, he has spent nearly all of his time rebuilding valves that are specific to his manufacturing industry. Candidate B, on the other hand, has worked in all areas of his facility exposing himself to hundreds of pieces of equipment. Clearly, Candidate B has a wider breadth of experience than Candidate A.

Complexity Level of Experience

Certain tasks are much more difficult to learn than others. For example, as a maintenance mechanic, troubleshooting equipment is likely to be much more difficult than performing tasks that are the same or nearly the same every time (such as rebuilding a valve). A Candidate who has experience performing tasks that are complex or performed in a challenging situation (such as responding to an emergency) is likely to be more valuable to an organization.

Quality of Work

Finally, just because someone has substantial experience performing a job, does not mean that the person has performed that job at a level that your organization would expect. With our maintenance mechanic example, let’s assume that Candidate A, over the years, has learned “shortcuts” to doing his job that lead to poor quality of work. These shortcuts might allow him to get by on his current job, but would not be acceptable in a different job.

The bottom line is that in order truly evaluate someone’s experience–“years of experience”–isn’t what is important. What is important are the skills and work habits that a person has acquired throughout his or her career. The answer to that question requires a more thoughtful assessment than simply asking for “years of experience.”