12 Proven Ways to Reduce Employee Turnover

So today, in this episode of The Elephant in the Boardroom, we are going to talk about turnover, which is at an all-time high. For some reasons, we will discuss. The first thing we think of when we think about turnover is exit interviews, and how that's how a lot of people try and gather the feedback to see why are people leaving. So I just want to read you a few sentences from this article about how to handle exit meetings on the internet.

Here's what it says. Avoid the meeting if possible. Just don't go if you think you could get away with it. That's the first tip. Second, if you must go, if you get cornered and you feel like declining would be burning a bridge, be totally bland. Why are you leaving? You found an opportunity somewhere else. Do you have any feedback? Nothing comes to mind. Third point.

Lie if you must. Usually, this person says, I'd say dishonesty at work is unethical, but this is not one of those situations. There's nothing good to be got from being honest. Last point, let it be awkward. If HR has a 20 question script and you're answering every question with nothing comes to mind, it's going to be weird. That's not your fault. Be prepared for the awkwardness and stick to the plan.

So that article completely cracks me up because it's true, right? Exit interviews are silly. I mean, you might get information out of, you know, one out of 10 of them, but you are not going to get the truth the vast majority of the time. The employee leaving feels like they have nothing to gain from being honest about this. And particularly if there's personnel involved.

You're leaving because you have a toxic boss. Maybe someday you would like that boss to give you a recommendation or you think, who knows? It's a small industry. I could end up working for them again. So anyway, exit interviews, no bueno. So there are two very high level main reasons why people leave in our opinion. One is pay. And I say, well, of course you have to pay a fair wage, but you say,

Well, before I say what I have to say that when you talked about turnover and I realized most of our audience will not even recognize this, it reminds me of Gilda Radner on Saturday Night Live going, what's all this about in this case? What's all this about turnovers? I love turnovers, particularly.

That is so bad.

Jane Curtin whispering in her ear and her going, nevermind.

Never mind. What's all this I hear about violins in the subway? The late great, Gilda Radner.

Exactly.

Late, great, Gilda Radner. So moving on. So on fair pay, there's a lot of research that's shown that if a company pays more than competitors, not Zuckerbergian hundred million dollar pay packages, but somewhat more than competition, there's lots of benefits to that in terms of lowering turnover, getting better.

Talent, feeling good about the company. But to do that, there have to be a lot of things in place to make the economics of that work out, because it's not just about reducing the turnover. And the worst possibility is you pay a little bit more, you actually get people who would stay and then you ruin that because of the second reason, which has to do with

Culture or management qualities, managers who deteriorate the relationship with employees who then decide to leave and never tell you why.

Yeah, for sure. The second, it's either actually a bigger reason than pay or it's about equal, depending on what of the various studies you believe. But in any case, we know it's huge. A lot of people leave jobs because of their manager, which then must mean that a lot of people stay because of their manager. And so what's the difference? What do those managers do? I, for example, worked for an amazing manager

Who I may never have left if I didn't come to work with you. But I mean, that was leaving for a great opportunity. But I was very happy. He made me feel respected, rewarded, involved, you know, many of the good things that are missing from the managerial style of people that people leave companies for. So let's talk about some of that.

And I had a manager who not only paid me very well, but viewed me as the favorite child, but was completely toxic. And as soon as it made sense for me to leave, I did.

Yeah, so apparently making somebody feel like the favorite child is not enough.

Not if you finally judge it as being very insincere and it's just you're the favorite of all the hated children. That might be a little extreme, but you get the idea.

Yeah. So of course, a lot of people these days, particularly those maybe, you know, younger than us seem to really value work-life balance. I saw, I'm going to attribute this to an executive at Coca-Cola and I hope that this is right. Now it's going to turn out to be Pepsi or none of the... I don't know. Well, apparently in a blind taste test, Pepsi wins. Anyway, he...

I believe he wrote something, he had a signature on emails that said something like, I may be sending this to you off hours, but I don't expect a reply. I don't want a reply. I mean, it was even, it was stronger than that. Like, I don't want you to respond to me until, you know, the next work day or whatever. And really drove home the point that, you know, even if I'm working insane hours,

I don't necessarily think that you have to. And I had never seen anything like that before. And I thought that was really kind of powerful. Because of course, we often feel like, if the boss is working crazy hours, how can I not?

So when it comes to management, one of the things that companies can do, well, first let's tell you a little story, which is there was a company that had a very high turnover in one of its functions, a function well known for having high turnover. There was, it was very high. And it was believed that it was that they weren't giving people benefits, which is a form of pay.

And they didn't want to give them the benefits because it was going to be too expensive. And then it came about where, and they did exit interviews all the time, but through a completely different method, it came out that what these people were leaving is because they thought they had been hired to work after they dropped their kids off at school and would be done working by the time they could go pick their kids up. And it wasn't insurance. Most of them had insurance already.

These were part timers.

And when it was discovered, it had to do with the scheduling issue. Very common now was not at all common back then. That was relatively easy to change and had a big impact on measurable impact on the turnover. So, which then had ripple effects and not only saving money, but better customer service, a whole series of things. So there's no way that one can fix a turnover. It's always going to be part of the friction in any corporate machine, but there are some.

Practical things we think could be done. And one of them is companies, and I say practical, this is still hard to do. Companies need to create training programs and support to teach their managers how to solicit and understand what individuals or groups of individuals need or are frustrated by in their job.

And not first of all, wait till the person leaves and then do an exit interview, a little bit closing the barn door after the horse's left. But also like any kind of feedback, but in this case it's getting input. It's better if it's more casual, more frequent and somebody acts on what they learn. So people are willing to be honest because they discovered it's not, doesn't hurt them. It's not detrimental. It's beneficial. And that dance is always going to be hard to perform.

But managers can be given support and guidance and training on how to do it better.

Yeah, absolutely. And also it has to, well, this is part of the training to receive it better. People have to feel, this is such a buzzword these days, but people have to feel safe to deliver this feedback. And that's not always easy. And sometimes maybe it's better if your direct manager isn't the one asking. We do this sometimes when we're

When we're asking for problems in projects that we work on. We sometimes have the managers in the room, and sometimes it's better if the manager isn't in the room. People may feel more free to talk if their boss isn't in the room, or their boss's boss isn't in the room, or whatever. You've got to come at it a lot of different ways to make this work.

I mean, there are undoubtedly some people in HR who are good coaches. And you could bring one in, talk to your people and get confidential information, summarize and articulate in a way that's not betraying any of the confidences, but gives you some actions you could take. You know, McKinsey in the 80s had a really a people eating culture. They prided themselves on teamwork and collaboration, but

People becoming partners were really disliked by their teams because of this intensity that had become part of the culture. And to their credit, they took this on head on. And so the evaluations of people who got to be partner, you know, it's one thing to say, we don't need to be a people leader, but gee, the 10 people out of 10 we made partner this year are all people leaders. So you have to walk the walk and talk the talk.

And they did. And did they turn the, did they turn the culture around 360 degrees as we like to joke, or did they turn the culture around 180 degrees? No, but did they make it better? Absolutely.

Another thing that we always say that causes turnover is tolerating the poor performers. Your good performers, your best performers, they know who's not pulling their weight. And guess who's pulling up the slack? It's those folks. So, and they're mad about it. So, you know, it may be a little, I mean, you're going to have to create some turnover, but if you...

Absolutely.

Get rid of your poor performers regularly. I mean, don't tolerate them for months, years on end after giving the appropriate training and time to make it work. That will help the rest of the team indirectly because they will feel better.

And we should make a distinction here. When we say the goal is to reduce turnover, the goal is to reduce turnover of good performers, not just some general number. Now it is true reduce, you know, having high turnover for performance can be expensive. And there are ways of fixing that of course, by having much tighter, better sense as to whom you should be hiring and by spending a lot less time.

Keeping those people, having a way to detect fairly early on if they're going to hack it or not. This does not work in many jobs, but having probationary periods, for example, can be done.

Here's another thing that bugs me about turnover. So without naming any names here, oftentimes employees feel, because I think it is true, that to get a big jump in pay, they have to leave the company. So if you work for a large company and you transfer to another division, you are likely not going to get the big pay bump that you would if somebody else recruited you.

Which makes very little sense. So somebody outside of the company who doesn't know your worth is willing to take a flyer on you with a big pay bump. But if you just go internally where they already know that you're good, you're gonna get, you know, just sort of the your normal increases. And maybe if you move, you'll get cost of living or something, but you don't get the big bump.

We've been told this by HR people, that that's just reality.

It turns out the devil, you know, it's not always more highly valued than the devil you don't. Yes, that that is right. And then, and then another point you've raised on other occasions is what if I'm somebody who wants more money? I'm very valuable. My job is worth more money, but the only way I can get more money is to be promoted and given, you know, more managerial responsibility, let's say, and I don't want that.

I want to keep doing the job I do really well that's really important. And, you know, there are companies that have figured out how to do that. Again, I remember a project I did many years ago, an insurance company. And the best underwriters, which was a very skilled job at that point, commercial underwriters, there was a lot of judgment.

Why are you saying at that point?

I don't know what AI is doing.

Holy cow, they've got to take like a million tests to get to the top of the field and... Anyway, go ahead.

Yeah. And you know, they have, they have a lot of experience and in particular would have to know that community and the business types and so forth. Well, as soon as they got to a certain level, they were capped out. And the only way to make more money was to take them out of this really the critical decision-making job in setting the rates for insurance and moving them up to managerial roles or moving them to bigger regions that they didn't know as well.

And one of our recommendations was don't do that. Just create a career track that allowed them to make more money and use their expertise, maybe not just in the field, but to teach other people.

So doctor, it hurts when I do this. Don't do that.

Yeah. Exactly.

Okay, so the biggest thing we think, well, I don't know about the biggest, but a big thing that will help reduce turnover in your companies is to make sure that your employees feel involved in the company in how their job is done. We just, in a recent podcast, talked about not involving employees in changes that are being made to the way they work. They not only...

Know more, so are valuable there, it makes them feel much better. They feel like they're part of something. They're not just showing up and being told, do steps one through 10 today and then you're done. It's, well, you know, step eight doesn't make sense. Step eight could be better. They need to be asked, they need to be listened to, and then step eight better be acted upon.

Because if they tell you, and they're right, and you do nothing about it, bye-bye. They're not gonna stick around if they have a choice, because they don't feel listened to, and it gets even more frustrating if they have made it clear that something is wrong and should be fixed and get ignored.

And another thing to think about is recognition. Now this is basically essentially the same concept as feedback. And we all know that, be it parenting or being a boss, negative feedback has megatonnage impact and compliments are often, I think that was a feather falling. So if you are critical of someone, and we're not saying don't be critical.

But how you deliver, in fact, it's important to be critical often, but how you deliver that so that that isn't all the person is hearing and how you are making sure that there's enough, if it's deserved enough positive feedback. So you have a well to go to and a balance. That's important because when, you know, someone's complimented, they do well, they go home, they talk about it.

They feel good about it and you don't want to wipe all that out by not knowing how to give negative feedback. And a lot of people just don't give any feedback at all. So people are in this limbo of, I don't know, did I do a good job? Did I not do a good job? I know I busted my ass. Did, you know, did they even notice? So none of us are trained really to do this and it's hard to do.

So I think our advice is pay fair or pay up. Obvious, but I mean, that's fairly obvious, right? And if you're going to spend money, if you're going to spend money on reducing turnover, put it into training your managers on how to manage their people in a way that is good for the company and for the person.

Yeah.

Because that will reduce your turnover much more dramatically than employee engagement surveys where you may or may not get any feedback worthwhile and certainly then the infamous exit interview where I've been told to avoid, be bland, lie and be prepared to be awkward.

Yeah, exactly. All right, well, go back to work. Bye bye. Thanks for listening. To learn how Harvest Earnings helps large companies overcome the bad practices, visit our website, HarvestEarnings.com or email us at info at HarvestEarnings.com.

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Also, please subscribe wherever you get your podcasts. And if you're feeling generous, leave us a rating and a review. It really helps others discover the show. Until next time, I'm Terry Long.

And I'm Jeremy Eden, and now it's time for us to get back to work. Bye.