Job Retention: De-mystifying The Human Equation
The legendary original madman David Ogilvy, the founder of the famed ad agency Ogilvy & Mather, once quipped "At 5:00, all of my inventory goes down the elevator." Even today in our digital landscape, most businesses may run on IT, but their pulse is very much flesh and blood.
That's why the biggest variable to worker retention lies in anticipating human behavior. And THAT'S why HR plays a crucial function in identifying the causes of employee turnover and implementing ways to stem the flow. The cost of high turnovers such as training and lost productivity adds up to a mind-boggling one trillion dollars a year, according to Gallup's Workplace Magazine.
It gets worse from there. The Bureau of Labor Statistics reports that the annual overall turnover rate in the U.S. in 2017 was 26.3%.The cost of replacing an individual employee can range from one-half to two times the employee's annual salary - and that's a conservative estimate. So, a 100-person organization that provides an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million per year.
Other factors that aren't baked into the equation include damage to which the cost is difficult to equate. Businesses need to consider the brand reputation's vulnerability to turnover. Assess whether you may be losing your customer's favorite stakeholder. Also, you need to ascertain what high turnover is doing to the corporate culture. Teams have to make adjustments to an empty slot, perhaps having to pick up the slack until a replacement is up to snuff with the rest of the team.
Reason # 1: Lack of Mentoring and No Path to Advancement
Business Insider published a fascinating piece that discussed the most common reasons for worker resignations. The results may surprise you. Contrary to popular belief, the top reason for quitting is not about money or the number of work hours. The primary reason for turning in the keys involves their perception that the employer is not doing enough to help guide their careers on the right path. A survey conducted by the Harris Polls revealed that lack of career growth was the #1 reason for quitting. The survey revealed that 77% of employees who resign felt that they are left "on their own" to develop their careers at the company.
Another issue that businesses need to address, is the fast-growing Gig Economy that is percolating throughout the globe. Its disruptive path through a tightening labor market is proving to be a strong attraction to Millennials wishing to be their own boss and blaze their own trails.
Reason #2: Balancing One's Work-Life with One's Personal Life
Another contributor to turnover often pertains to work-life balance issues. Here are more examples where the workers felt that the company neglected to consider their bucket list. Perks such as flex hours, mobile technology and teleworking, increased leave, and wellness programs are all examples of employee-friendly benefits that would help them better balance their life and work considerations. Inc Magazine published the report entitled Global Market Trends which talks about the reasons for employee burnout and implementing benefits that help remedy the problem.
Reason #3: Negative Management Tactics
The March 2020 issue of the scholarly Journal of Leadership & Organizational Studies presents a piece entitled Do Managers Really Influence Employee Turnovers? It identifies 2 issues where managers influence the ebb and flow of worker turnover. These managerial approaches to personnel management are known as "Downward inspirational Tactics. The tactics involve "managerial attempts to motivate followers to carry out their requests.
pressure tactics, which some managers may use to demand or control certain employee behavior, and
"inspirational Appeal" which some managers use to appeal to employees' values, goals, and aspirations."
The results of these tactics may run contrary to company interests. The study states that "When managers use pressure tactics, the researchers found that it is more likely that employee job satisfaction and emotional engagement with their job will decrease."
Reason #4: Money
Compensation comes in as a distant 5th place as the reason for voluntary resignations. The Work Institute found that compensation was the fifth most common reason people quit their jobs, with nine percent of people citing it as the primary reason they left. A study conducted by Glass Door revealed that "35% of employees are so unsatisfied with their salary that they're willing to start a job search over it."
Reason #5: A Hostile or Non-supportive Work Environment
The work environment also plays a vital role in employee retention. We're not talking about the physical environment. This issue deals with more psychological and intrapersonal interactions. Workers often sight attitude issues such as personal respect from management and fellow workers, growth opportunities, management styles, and company culture. Change in this category starts at the top and workers are well aware of what rolls downhill.
Reason #6: Unfulfilling Work
Finally, tedium and lack of a challenge finish off the contributions to job dissatisfaction. This entails lack of an opportunity to hone new skills lack variety, and task significance are all issues that need to be addressed. autonomy, and feedback. Three different psychological states determine how an employee reacts to job characteristics: experienced meaningfulness, experienced responsibility for outcomes, and knowledge of the actual results. According to Lumen Candela, an online learning platform, "...the work-content factor, which includes variety, difficulty level, and role clarity of the job, is the most strongly predictive factor of overall job satisfaction" (Saari & Judge, 2004).
The Manto Bottom Line
The biggest challenge for HR is to understand that the "one-size-fits-all" approach to reduced turnover is not a viable solution. Each and every employee has a unique story to tell. The company's task is to identify personal behavior and attitudes band be proactive in changing outcomes. Manto AI is a start-up whose time has come. It employs an AI-based cloud solution that accurately predicts future human behavior. The advanced predictive technology eschews the "Eye-in-the-Sky" approach to HR to a more worker-friendly model that adheres to non-manipulative motivational tactics that are so greatly appreciated by the workforce. The platform will generate more "thumbs- up" on your next employee review in appreciation for the personal interest your company is taking to support personal growth and provide a path to career advancement.
For more information on how Manto AI can put a tourniquet on your high turnover rate, contact us at [email protected]