Turning Over High Turnover Rates: Keeping Your Employees Happy

June 1, 2007


Keeping Your Employees Happy

By Michael Humphrey

The term “company man” is an ancient relic in today’s world and not just for its gender bias. Lifetime loyalty in the workplace has gone the way of transistor radios and drive-in movies.

But if the pendulum of tenure lengths swung to the other extreme over the past 20 years, it is starting to swing back, says Dr. Wes Scroggins, an expert in human resources and an assistant professor in management at Missouri State University.

“Turnover and retention are very hot topics right now in organizations,” Scroggins says. “For most managers that I talk to, it’s a real concern. In a tight labor market, which is forecasted to get tighter, finding sufficient numbers of good qualified employees is really difficult.”

There’s reason to be concerned, Scroggins says. The latest surveys show that more than 75 percent of current employees say that as the job market improves they are somewhat likely or very likely to go looking for a new job.

“That tells you what employees are thinking,” he says. “That communicates that there is some source of dissatisfaction among many employees. They are willing to move if another employer is willing to provide them a good reason to do so.”

That’s an expensive attitude for any company’s employees to have. It takes money to recruit, train and make up for lost time. But money is not the only measure of cost. High turnover rates bring down morale, for employees and management alike. And in a world where leaving may be an employee’s only perceived source of power, it will continue to be wielded.

“It’s very costly when companies lose employees, when you think about what you’ve invested in them,” Scroggins says.

Now for the good news

But searching for a job is stressful for many people and starting a new job shoots to the top 10 of stressful life changes. Not that it’s always a bad idea, but many employees would be more than willing to stay if they felt valued.

Which leads to a buzz phrase: employee commitment. The higher it is, the less turnover you have.

So are businesses returning to the old model of mutual commitment?

“I wouldn’t say it that way,” Scroggins says. “I think organizations are trying to foster commitment and loyalty, but I don’t think there are many that are trying to go back to this concept of lifetime employment. The organization is looking for other ways to build that commitment.”

And it begins from within.

“It comes down to what’s called the employee value proposition,” Scroggins says. “That’s what employees want from their job, the outcomes. To the degree that you can as an employer, you need to try to meet that proposition. Because to the degree you can do that, you can at least lower your turnover.”

And if you are having high turnover, that proposition is not being met somewhere. But don’t assume you know where that is.

“Before you can fix the problem, you have to identify the problem,” he says. “Do the exit interviews and survey current employees to find what the problem is.”

Once you have a sense of why your turnover rate is high, here’s a look at four key strategies to retaining your best employees.

1. Look for longevity during the hiring phase.

It’s the Stephen Covey adage – begin with the end in mind. When you are hiring, says Scroggins, don’t recruit and interview with a new employee in mind. Do your candidate searches with a long-term colleague in mind.

“The key concept here is person-job fit,” Scroggins says. “You may have a good candidate who has all the qualifications, and you may have an immediate need to fill that position, but you want to make sure the candidate actually fits well into the job.”

How can you tell if you are hiring the right fit? Scroggins repeats – know thyself.

So it might be nice to say that your company has family values. But if the bottom line drives everything that a certain manager does in the company, the fit isn’t going to work for someone who bought that family values line. If you’re a company full of drivers as managers, look for drivers. At the same time, drivers won’t be satisfied in companies that try to find a good balance between work and private life.

For Scroggins’ tips on hiring practices, refer to the Spring 2007 edition of Missouri Meetings & Events.

2. Reward good employees with pay increases and advancement.

Of course, money talks – especially when the raises are based on merit. That will always be a factor in keeping the best employees. But with more than 75 percent of the work force saying they might bounce sometime soon, obviously money is not the only incentive to keep even success-minded employees in the company.

“I would choose a better overall work situation than just go for the highest salary,” says 20-year Hallmark employee Mark Smith, procurement manager in contract services supporting human resources. His department has several employees who’ve been around between 20 and 40 years.

Plus, wage increases are not always in the manager’s power.

“Companies say they are trying to make their salaries more competitive within a given market,” Scroggins says. “But if you’re a hotel manager in a larger chain, you might be constrained in how much you can raise salaries. That means you are going to have look at other ways of showing good employees that you value them.”

That can mean giving the best employees more flexibility in doing their jobs, or even more responsibility at times. The danger is most employees will see extra responsibilities as a burden if they are not compensated.

But Scroggins says there is more than one way to compensate employees, which leads us to the next step.

3. Improve the work environment with flexible time, career development and physical improvements.

“Try to sell your company on other factors than salary,” Scroggins advises. “Maybe you can offer some flex-time arrangements. Find other things that people value that you can sell your organization on.”

Flexible schedules are a very satisfying form of compensation to many employees. So is professional development.

“Career development opportunities are high on the list of activities that employers use in trying to entice people to stay,” Scroggins says. “It is perceived as having value, because it makes the employee more marketable.”

You can already see the dilemma, however, when you increase the employee’s sense of professional value. They want to rise or move based on their increased worth in the marketplace. Still, Scroggins says it’s a factor that keeps employees loyal to a company.

And Smith adds that the aesthetics and convenience of his workplace at Hallmark is a factor that keeps him happy in his job.

“I would say the work environment here is pleasant and positive with lots of conveniences,” Smith says. “I just moved into a new office space and it’s nicely painted, there’s new carpet and new office furniture.  And, the Hallmark headquarters is located in the Crown Center complex with great shops and restaurants right here, in addition to the employee cafeteria, dry cleaning services, U.S. Postal services and other great employee services available in the headquarters building.”

4. Immediate relationships

But perhaps few factors work better in retaining good employees than building personal relationships.

“It’s tough to walk away from your friends, meaning A, your peers, and B, the customers,” says Stephen Miller, director of operations for Light House Properties, which owns business properties throughout the country. “When employees know the customers and the customers know the employees, that makes a difference.”

The very idea of commitment is not to a name or even a mission statement, but to the people you work with every day. Scroggins says management, especially management closest to the employees, is a key factor in making relationships work.

“I do think management can go a long way in creating experiences that keep people around,” Scroggins says. “And if you find a manager that’s causing a lot of turnover, you have to deal with that as well.”

And Scroggins says all this goes back to his mantra – study your company to find what’s really happening.

“If you decided compensation is the issue, and it’s really about flex time or advancement,” he says, “what good does it do to throw money at the problem?”

(Michael Humphrey is the Contributing Editor from Kansas City, Mo.)


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