Leadership Barometer 40 Turnover

March 2, 2020

Is employee turnover killing your company? Turnover is one of the most significant, and avoidable inhibitors of profit. The US national average for turnover usually runs between 2-3% per month, whereas the top 100 companies often have a turnover rate of only 2-3% in an entire year.

In this article, I put a spotlight on the turnover problem and offer some antidotes that are common sense but sometimes not common practice.

For professionals, the cost of replacing an employee is roughly the annual salary of the individual. That means a company with 1000 people, each with an average annual salary of $48K, will lose more than $17 million per year due to turnover. These costs go directly to the bottom line in good times and bad.

Even in periods of high unemployment, turnover is still a problem for most groups. When jobs are scarce, workers may not leave immediately, but they are quietly planning on exiting once the job market improves.

One recent estimate is that 40% of workers are unhappy and plan to move within the next year if jobs become available (National Labor Statistics). That would mean a dramatic rise in turnover costs and a significant shift of the best talent from organizations with poor practices to those with stronger cultures.
How can we fight this needless drain? Here are seven key factors that can help you reduce turnover in your organization:

Supervision

When people decide to leave an organization, it is most often the result of dissatisfaction with their direct supervisor. The most important thing to improve is the quality of leadership at all levels. Teaching supervisors and managers how to create the right culture makes a huge difference in turnover.

Unfortunately, when money is tight, often the first thing that gets cut is training. Improving leadership at all levels needs to be a continual investment, not a one-time event when someone gets promoted to a supervisory role.

Supervisors who are well trained recognize their primary function is to create a culture where people are engaged in the work and want the organization to succeed. These people rarely leave because they are happy where they are.

Compensation

Pay is often cited as a reason for people leaving an organization. Pay may be a factor in some cases, but it is often just the excuse. What is really happening is that the work environment is intolerable, so the remuneration for the grief to be endured is not a good tradeoff. We need to teach managers to improve the trust level within the organization.

High trust organizations can pay workers non-inflated wages and still have excellent retention rates. There are numerous examples of this. One of them is Zappos, where they have such a great culture, that when employees are offered $2000 to leave, they do not take it.

In Drive: The Surprising Truth About What Motivates Us, Dan Pink points out that the relationship between pay and motivation is not what most people think. He cites several studies that show a pattern where higher pay can actually lead to poorer performance.

Pink advocates paying people enough so that the issue of money is off the table. Then three other conditions, Autonomy, Mastery, and Purpose, will take over as the key drivers to satisfaction and motivation, and therefore, retention.

A better future

Another key factor that causes people to leave is lack of a path forward. Employees who can visualize some pathway to a better future will generally stick around to experience it. Training and development are a key enablers for people to know there is a brighter future. Cross training is a particularly helpful way to have employees feel they are being developed to be more important to their organization. Cross training also helps make the work environment more interesting.

A family atmosphere

If you read about the culture of the top companies worldwide, there are many common themes. One of these is that employees describe their work associates as their extended family. They cherish the relationships with their co-workers. Sure, there will be some squabbles and an occasional lecherous uncle, but the overarching atmosphere is one of a nurturing and caring group of people similar to a family. Who would want to leave that environment?

Freedom

Enabling people to do their own work without being micromanaged is a characteristic of organizations that are good at retaining people. Nothing is more irritating than being ordered to do things in a certain way by a condescending boss who does not really understand the process as well as you do.

The ability to use one’s own initiative and creativity to get the job done right helps build self esteem, which is a key ingredient in the retention of people.

Recognition

Knowing that someone cares about you and recognizes your efforts and accomplishments goes a long way toward building employee loyalty. A loyal employee is not out there looking for another position. Instead, he or she is thinking about how the organization’s success can be enhanced through even more effort. The collective muscle of thousands of employees who each feel that way is amazing to behold.

Safety

Many organizations live on the edge of impending disaster. The competitive world has forced legions of companies to downsize on a regular basis simply to survive. When employees witness the revolving door that occurs as a result of things they cannot control, you can’t blame them for wanting to find a safer mode of transport through their career.

If the other suggestions above are followed religiously, then the organization will have a lower risk of having to lay off people, so they will enjoy a lower turnover rate.

These seven factors are not an exhaustive list, but I contend that groups who focus on these seven conditions and understand the dynamics will have consistently lower turnover rates, saving millions of dollars each year. That advantage is sustainable and scalable. It just requires leaders at the top who are skillful and relentless at applying these principles.

Bob Whipple, MBA, CPLP, is a consultant, trainer, speaker, and author in the areas of leadership and trust. He is the author of: The Trust Factor: Advanced Leadership for Professionals, Understanding E-Body Language: Building Trust Online, and Leading with Trust is Like Sailing Downwind.


Successful Supervisor 98 Know Your Purpose

October 21, 2018

It is essential for you to have a purpose for your work other than to put food on the table. We tend to lose sight of the meaning of life if we cannot articulate a clear purpose.

Let me clarify the difference between an individual’s purpose, values, mission and vision so you can appreciate the role that purpose plays for your life.

Purpose tells you WHY you are here

The formal definition of purpose is “something set up as an object to be obtained: intention.” Purpose represents a personal commitment for the highest calling of your being. Without a firm understanding of your purpose, your work loses relevance. The reason you get up and go to work each day is to fulfill your purpose.

It is important to be very specific and concrete with your purpose statement. Try to boil it down into the fewest number of words, so you can communicate it to others succinctly. If possible, I like to think in terms on one article (usually “To”) followed by one verb and one noun.

For my business, my purpose is “To grow leaders.” I believe that is why God put me on this earth and gave me the capabilities that I have.

Values form the FOUNDATION for everything you do

Values allow us to test the rightness of an action or thought. These important concepts about what life is supposed to be like were programmed into us long before we were able to walk and talk. Usually values come from our parents, but they are also shaped over time by other influences such as school, friends, church, experiences and other events that happen early in life.

For most of us, the set of values we obtained in our youth will remain with us the rest of our life. It is difficult to change a deep-seated value, and most people would not want to do so.

Our values form the LENS through which we view everything around us. Values are also highly culturally specific. For example, to bribe another person is not acceptable in some cultures and perfectly fine in others.

It is important to have your values clearly visible to you. Write them down and refer to them often. For best results, repeat daily.

Mission tells you WHAT you are doing now

Mission is important because you need to know exactly what you are trying to do now. It is similar to purpose, but more specific. Think about walking into your place of work and picturing exactly what you are trying to accomplish today. That is your mission. I believe that mission statements should be short and memorable. Let me share what I consider a good mission statement and then share one that is not so good.

Wegmans is a grocery chain that is based in Rochester, N.Y., where I live. Their mission is “Every day you get our best.” That makes a great mission because it tells all of the employees exactly what they are trying to accomplish on a daily basis.

Here is a mission statement that doesn’t work for me. “To establish beneficial business relationships with diverse suppliers who share our commitment to customer service, quality and competitive pricing.” The statement is so general that is gives the reader no idea what industry is involved, let alone the specific company. Actually, that is the mission statement for Denny’s. What? Where is the food?

Vision tells you WHERE you are going

The vision statement is strictly about where you are going in the future. It describes accurately the end state or objective you are working toward. A good vision pulls you in the direction you wish to go. Without a good vision there is little impetus to improve on the status quo.

Some people believe that a vision that has the possibility of not happening sometime in the future is a poor one. I disagree. Consider the early Federal Express Vision: “Absolutely positively overnight.” It is easy to see that there were some times when acts of God would prevent the company from doing this, but that did not make it a bad vision. They made a lasting organization around that compelling image.

Make sure you have these four concepts well documented for your life and your organization too. You will go much farther than you would go otherwise.

This is a part in a series of articles on “Successful Supervision.” The entire series can be viewed on http://www.leadergrow.com/articles/supervision or on this blog.

Bob Whipple, MBA, CPLP, is a consultant, trainer, speaker, and author in the areas of leadership and trust. He is the author of four books: 1.The Trust Factor: Advanced Leadership for Professionals (2003), 2. Understanding E-Body Language: Building Trust Online (2006), 3. Leading with Trust is Like Sailing Downwind (2009), and 4. Trust in Transition: Navigating Organizational Change (2014). In addition, he has authored over 500 articles and videos on various topics in leadership and trust. Bob has many years as a senior executive with a Fortune 500 Company and with non-profit organizations. For more information, or to bring Bob in to speak at your next event, contact him at http://www.Leadergrow.com, bwhipple@leadergrow.com or 585.392.7763


Successful Supervisor 31 – Reducing Conflict

June 18, 2017

Conflict between people is simply part of the human condition. Organizations are a good place to observe conflict because they have all the ingredients that encourage people to bicker.

First of all, people are in close contact for many hours a day. It is a fact that if you put people together for a long period of time, they are going to end up driving each other crazy. It happens like spontaneous combustion at the bottom of a pile of oily rags.

The second condition that encourages conflict is stress. Organizations are constantly under stress to optimize performance of all their resources. The most typical stressor that causes conflict is time.

People tend to overvalue their own contributions and undervalue the contributions of their work mates. It is just the way we are programmed.

I got interested in this topic of conflict a couple years ago and actually wrote a 30 part video series entitled “Surviving the Corporate Jungle.” Each video is only 3 minutes long and each one has an exercise to instill a new habit that can reduce conflict between people. The series was produced by an organization called “Avanoo.”

Here is a link to a free sample of three videos from my series.

In this article, I want to give a few overarching tips that may be most helpful at the supervisor level. The subject is endless, so you may wish to contribute your favorite tips after reading mine.

Appreciate Differences in People

Each person is unique, so what works for one person may not be ideal for others. In addition, we each see the world through glasses that only we can see through.

When we witness another person doing something that does not look or feel right to us, we grit our teeth and instinctively push back, trying to get the other person to see it our way.

I call this phenomenon the “I AM RIGHT” condition, and I have purchased hundreds of three-inch buttons with those words on them. I give them out at all my seminars on trust.

The tip for the supervisor is to recognize that each person is wearing an imaginary I AM RIGHT button all day.Since each individual experiences every facet of organizational life through his or her own paradigm, it is no wonder conflict erupts.

The supervisor can help people recognize that we have no choice but to see things from our perspective, so it is perfectly natural that there will be tension at times. Try to see the other person’s perspective as being valid, and you will reduce conflict.

Go Back to the Sense of Purpose

Even though people may see things from different perspectives, we can usually get along much better if we remind ourselves that we share a common purpose.

We may have different functions, but we are all important parts of the process, and we are all needed to be at our best if the job is to get done well.

The supervisor is the main coach to help people understand the purpose and remember the larger mission when tempers flare about how to do things.

The supervisor paints the vision of the whole organization onto the canvass that represents her part of the whole and makes sure everyone sees that connection. When people recognize that they are all pulling in the same direction, the individual idiosyncrasies don’t have as much power to polarize them.

Build a Culture of Trust and Love

When a group of people trust and love one another, the seeds of conflict have a difficult time taking root. Building a culture is a daily task that never ends, but the task is a joyous one because the end result is a much happier existence, not only for the supervisor, but for everyone on her crew.

Building that kind of culture takes tending and constant effort. First of all, the supervisor must model the right kind of behaviors herself at all times. She must be the source of love and trust between people, even when things get tense.

It is her actions and words that make the difference every day. The most powerful thing a supervisor can do to build that kind of culture is to make the environment safe and not phony.

Eliminate Playing Games

If you observe most stressful groups at work, you can see that much of the time people are playing head games with each other in order to gain advantage. The environment is phony and full of intrigue. The supervisor needs to create a kind of culture that is real, where people are able to disagree without being disagreeable.

Hopefully the organization has a concrete set of values, and the supervisor must adhere to those values in every conversation and action (especially body language).

The workers are there to do a specific job, but that does not mean the atmosphere needs to be heavy. Great teams make the work light and fun, because they support each other and bring each other up. The supervisor needs to understand a great culture begins with her.

Avoid Inter-Group Conflict

Another common problem is that group cohesion can become so strong that silos begin to form. The workers bond together and against another group in the process as the enemy.

You can observe a kind of Civil War going on in many organizations on a daily basis. It is amazing to witness this hostility, because if you go up to the next level the warring groups are really on the same team.

It is up to the supervisor to keep her area from losing this larger perspective. One idea to accomplish this is to share resources with parallel groups. If team members see an unselfish person in their supervisor, then the ability to maintain proper perspective is easier.

These are just a few of the ideas in my series on “Surviving the Corporate Jungle.” For the supervisor, these ideas may seem like a heavy load, but the joys of doing things in an uplifting way makes the work a labor of love.

This is a part in a series of articles on “Successful Supervision.” The entire series can be viewed on http://www.leadergrow.com/articles/supervision or on this blog.

Bob Whipple, MBA, CPLP, is a consultant, trainer, speaker, and author in the areas of leadership and trust. He is the author of four books: 1.The Trust Factor: Advanced Leadership for Professionals (2003), 2. Understanding E-Body Language: Building Trust Online (2006), 3. Leading with Trust is Like Sailing Downwind (2009), and 4. Trust in Transition: Navigating Organizational Change (2014). In addition, he has authored over 500 articles and videos on various topics in leadership and trust. Bob has many years as a senior executive with a Fortune 500 Company and with non-profit organizations. For more information, or to bring Bob in to speak at your next event, contact him at http://www.Leadergrow.com, bwhipple@leadergrow.com or 585.392.7763