Q. I am the president and founder of a successful and well-established engineering firm. We are a $30-million, 100-employee, privately held company and unfortunately average about 20 percent turnover annually. The ramifications associated with backfilling these positions is painful. Any ideas about how we can reduce turnover?
A. Turnover is expensive and painful. Replacement costs can add up to three times the annual base salary per position. This is based on loss of productivity, the down time between hires and the time it takes to get new hires up to speed which results in a loss of business and revenue. Do you know how much this is costing you and your company?
The big question is why are you experiencing 20 percent turnover year after year? Does it tend to be one department over the others or is it just across the board?
If it is one department you must take the time to evaluate that group, from management to individual contributors, and policies and procedures to isolate the problems. Do you conduct exit interviews? The purpose of an exit interview is to gather information for improving working conditions and retaining employees.
Employee surveys if done correctly and anonymously can reveal many underlying issues and is a great place to start. Hire a consultant to conduct the interviews and surveys and provide feedback so that the employees will be more inclined to be candid, as opposed to worrying about burning bridges.
If the turnover is across the board chances are you are dealing with a leadership issue. I suggest working with a consultant who can assess your leadership skills and style. Self-assessment is difficult even for the most humble.
The following programs are proven to reduce turnover and raise employee morale.
• Onboarding - The process of converting a candidate for a new role within an organization and to familiarize the new hire with the culture, environment and existing team
• Monthly management meetings – Informal one-on-one meetings between management and direct reports to provide positive feedback and constructive criticism
• Performance reviews – An analysis of an employee’s work performance for a fixed amount of time to determine if objectives and expectations have been achieved
• Mentoring programs – A partnership through which one person shares knowledge, skills, information and perspective to foster the personal and professional growth of someone else
• Career and education development – Support employees to manage their careers by learning new skills and making improvements.
• Compensation and benefits – Offer market competitive compensation and benefits (minimum 2 weeks vacation) and flexible work time.
• ESOP – Employee Stock Ownership Programs – No. 1 retention program
• Suggestion box – Anonymous employee suggestions for management, great method of obtaining employee feedback
• Brainstorming sessions – A group problem-solving technique in which members spontaneously share ideas and solutions
• Employee recognition programs – Recognizing employees for achievements by saying thank you, giving praise, showing respect and providing opportunities and incentives
Know your company blood type, every company has one. If you are a fast-paced company, you need to attract people to your organization that excel working in fast-paced environments. If you are a chaotic disorganized company you want to attract people who are flexible, open minded and open to constant change.
But I must say that these types of environments are unhealthy and foster poor morale. Work on creating a healthy work environment to promote a strong business. To avoid turnover requires an honest evaluation of yourself, your team and the entire organization. Once you’ve determined who you are, create a “best fit” profile, and make it a point to only hire people that fit that criteria no matter what the skills are. The best consider the team to be the most important triad. “The best team with the best players wins,” Jack Welch, former General Motors executive and author.
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Jennifer Laxton is a senior partner with Executive Search Associates in Santa Rosa www.esa.com. ESA is an executive search and consulting company. You can reach her at 707-525-1010 ext 101 or jklaxton@esa.com. If you have questions with regards to your situation send an email to askjen@esa.com.
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