Addressing your company culture isn’t easy, but it is key to keeping employee turnover and its associated costs down.
Leaders of organizations suffering from a high turnover rate sometimes don’t understand the role that company culture plays. If your company culture invests in a hiring process that guarantees team members with strong character, talent, and ability, then the rate of turnover can be very low — even in the single digits.
But if your company places more emphasis on other areas of business and ignores the rationale behind its hiring process, you might end up bringing on candidates who don’t mesh well with your organization. And this is a big deal in manufacturing, which saw a 1.2% spike in turnover in May 2015, which coincided with a months-long turnover increase compared to 2014.
Research shows that people who feel they don’t fit into a company’s environment will often leave. This means that high levels of voluntary turnover, when people leave as a choice, usually arise from companies struggling with their culture.
Addressing your company culture isn’t easy, but it is necessary to keep turnover and its associated costs down. The key is rejecting these four big myths, often embedded in a company’s culture, that keep your turnover high:
1.Turnover is a cost of doing business. Like increasing healthcare costs or payroll taxes, some leaders apathetically believe turnover is just a normal part of business that should be accepted and budgeted for. This kind of reasoning is a real cop-out, and leaders should reject it. Even positions that are repetitive or monotonous don’t have to correlate with high turnover if the people in those jobs are treated respectfully.
To think about it another way, are you willing to fly on an airplane with an acceptable defect ratio of 20%? Of course you aren’t. So why would you tolerate a turnover rate of 20%? High turnover is not a normal state of business — don’t just accept it.
2. A warm body is better than nobody. Hiring managers, under pressure to bring on new candidates, sometimes succumb to the thinking that anyone is better than no one at all. They settle for candidates who meet the minimum requirements and end up bringing people on who don’t fit into the business.
The challenge of tackling ongoing turnover can lead many companies to the placebo solution of hiring temporary workers. In the end, this only increases turnover and often creates more problems within an organization.
3. The manager’s role is minimal. Gallup research has shown that a culture of bad leaders is the biggest cause of turnover. Leaders, overwhelmed by the demands of daily operations, often function below their pay grade and don’t address poor performers. This impacts the morale of good performers, who end up having to do more.
These types of managers are unable to further develop and coach their teams, leaving inadequacies and imbalanced workloads for their staff to address. People might sign on to work for an organization, only to leave because of ineffective managers. High performers don’t want to work for weak leaders.
4. It’s human resources’ fault — not mine. While HR is a key partner in reducing turnover costs, pointing fingers at HR as the root of high turnover is wrong. Turnover is an organizational issue that requires every leader’s attention to resolve.
In fact, HR’s role in turnover resolution is likely the opposite of what many imagine. Your HR team can provide administrative support to solve turnover problems faster, including measuring, monitoring, and championing the efforts of the leaders — who are ultimately responsible for turnover.
Mending the Culture-Turnover Disconnect
Leaders who believe these myths will cause their organizations to lose both money and morale. Instead of continuing with a hiring process that doesn’t work or perpetuating a company culture that accepts turnover, work to improve inherent problems to keep turnover down.
Here are a few remedies that can keep turnover at a reasonable rate:
Refine your hiring process. Your hiring process is the first glimpse a candidate gets into your company. By making changes, such as bringing your best team members to the interview table, you’ll ensure that the people you’re hiring will fit in and perform well.
Encourage leaders to take action. The difference between a good leader and a bad one can determine whether an employee stays or leaves, so you must motivate managers to perform at a higher level. When they are decisive and take action to resolve recurring issues, those performing under them will follow suit.
Keep morale high. When team members feel weighed down by their jobs, they are far less likely to be productive. Challenge your employees, but offer support when needed. If you demonstrate faith in your staff, they’ll not only feel valued and more comfortable in their roles, but they’ll also be more apt to get the job done.
Contrary to conventional wisdom, turnover doesn’t have to be part of your business plan.
When you work to fine-tune your company culture by removing flawed or misguided processes, employee satisfaction increases — and this is the most direct route to reducing turnover.
Sue Bingham, founder and principal of HPWP Consulting, has been at the forefront of the positive business movement for 30 years. She’s driven to create high-performing workplaces by partnering with courageous leaders who value the contributions of team members.