Hiring Wisdom: The Top 10 Ways to Reduce Employee Turnover

In order to minimize employee turnover, you’ve got to:

1.  Hire tough. Set high standards and never lower the bar;

2.  Let new employees know why their jobs are important;

3.  Never think: ”It’s just an entry-level job.” Those jobs most directly impact your customers experiences;

4.  Pay the highest wages you can afford. When you pay more, you can expect and get more;

5.  Give the first pay raise as soon as the new employee deserves a raise, not on pre-set time schedule, but on a productivity or learning schedule;

6.  Give recognition when recognition is deserved;

7.  Train for process, not for speed;

8.  Help the new employee make friends at work;

9.  Make work FUN;

10. Learn to fail fast. When you make a hiring mistake, cut your losses immediately.

via Hiring Wisdom: The Top 10 Ways to Reduce Employee Turnover.

Hiring Wisdom: The Top 10 Ways to Reduce Employee Turnover

Tech companies have highest turnover rate

According to PayScale’s most recent survey, employee turnover rate among Fortune 500 companies is greatest in the IT industry.

According to PayScale’s recent employee turnover report, the employee turnover rate among Fortune 500 companies in the IT industry is the highest among all industries surveyed. Here’s PayScale’s list of companies with the shortest tenure:

As you can see, some pretty prominent tech companies are at the top of the list (Amazon, Google, Mosaic, etc.) Now, the question is, why? It could be that the companies suck, I don’t know. But it’s hard to say that about Google, who offers its employee perks that seem almost fictional (onsite pool tables, ping pong tables, video games, onsite haircuts, and onsite gyms with swim-in-place pools).

Could be that the jobs are high stress. I can see where working for these highly competitive companies could cause stress. But, again, I don’t think it’s that. IT pros kind of know going into their line of work that stress is going to be part of the bargain.

I’ve noticed that here at my company we have a high churn rate in the IT department. There is not a day that goes by that I don’t encounter a complete stranger in the break room. (Strangers that always appear to be about 12 years old, by the way. What’s the deal with that?)

So what are the reasons for the high turnover rate in tech companies? For one, the job outlook is picking up and smart IT pros are finding that they have their pick of IT jobs. Their skills are highly marketable—why not take advantage of that?

But according to Leonid Bershidsky in a piece he wrote called Whyare Google employees so disloyal?, there may be something else going on:

“Technology companies that hire the smartest young people around all but guarantee themselves a high churn rate. A lack of employer loyalty is a defining feature of Generation Y. No matter how satisfied these highly marketable young minds may be, no matter how much they enjoy the free meals and hybrid car subsidies, they will jump ship as soon as they get bored or get a better offer elsewhere.”

It would be easy to take a “kids these days!” approach like this. But, really, if you’re in your 20s and have cutting-edge IT skills, then why not explore different companies? If you’re not going to do it at the beginning of your career, when are you? Job-hopping becomes a little more complicated after the house and kids come along.

Also, it’s not like Google and their ilk are buying a bunch of gold watches with plans to hand them out at retirement ceremonies. Modern companies, as far as I can see, don’t put a lot of heartfelt promise into long-time employment for their workforce.

In other words, not many young people now go into a company with the expectation, like guys returning from WW II, of that’s where they’ll spend the rest of their working lives. Part of that may be because of their age group “personalities,” but it may also be because they haven’t exactly seen the concept of loyalty practiced by the companies themselves. They’ve probably lived through layoffs experienced by their parents.

Also, it doesn’t appear that tech companies are complaining about the churn rate. After all, if a bright mind stays for a while and then leaves, it’s likely that another bright mind will step in and help take companies places they haven’t considered.

via Tech companies have highest turnover rate – TechRepublic.

Tech companies have highest turnover rate

How Much Employee Turnover Really Costs You

You’ll hear people talk about the high cost of turnover, but when you try to press for the actual costs they don’t really know. It seems like a mysterious thing that people talk about.

And it’s true–the costs are largely hidden. It doesn’t hit your profit and loss statement. It’s not something in the budget. There are some hard costs, like the cost to post a position on a job board, or for specialized positions, the cost of a headhunter. But, even if you recruit strictly through word of mouth and employee referrals, there are costs to losing an employee. Here are the things you’re paying for.

Lowered productivity. The person who left was doing something, right? And who is doing that job now that the position is vacant? No one? That’s lost productivity right there. What if you just farm out the tasks to other people? Chances are, the most important tasks will get done, but other things will fall by the wayside.

Overworked remaining staff. Can you measure this in dollars? If your employees are exempt, their paychecks remain the same, so how is this a cost? Well, as they get stretched thin, their quality of work goes down as does their satisfaction and engagement. Which means that they are more and more likely to start looking for a new job and leave. And the longer they stay in their overworked roles, the harder it will be for you to regain their goodwill even after you’ve filled the vacancy.

Lost knowledge. A ton of people can do what your former employee did, but they don’t have the specific knowledge she had. It’s not just about putting numbers in a spreadsheet, writing code, or selling a product. It’s about knowing the people, the traditions, the location of relevant information, what the boss likes and a million other things that come from working for a company for a long period of time. All that goes away when someone quits. And sometimes it’s more than just general company knowledge. How many of your employees have their jobs documented well enough that someone could figure it out with their documentation? Do you have people cross trained? Does one person have control of the passwords?

Training costs. Paid training costs are obvious. If you have to pay $5,000 for a seminar to teach your new employee your complex internal computer systems, that’s a cost noted on a spreadsheet. But, when there are no training classes to attend, there are still costs. Someone has to sit there and show him what to do. Someone has to double check work until the employee has proven himself. And that all takes the “trainer” away from her regular job. Which means you’re paying two people to do one job. Costly.

Interviewing costs. If you have to pay travel expenses, that’s costly. But if all your candidates are local, you still have to take the time to go through resumes, talk with numerous people, do formal interviews (which take an inordinate amount of time), talk with colleagues, and figure out who is the best employee.

Recruiters. I’m not talking headhunter fees (which are absolutely worth it for some positions), but rather the employee who has to find the candidates. In some business, you have dedicated HR or recruiting staff that takes care of this. They all get paid. And for smaller businesses, this task usually falls directly on the shoulders of the hiring manager–you know the one who is extra busy because he’s down one person? That costs too.

What do all these costs add up to? Well how much? Estimates run as high as 150 percent of annual salary. Much less for lower level positions, but still significant enough to make retention a high priority for your business.

This doesn’t mean you shouldn’t fire problem employees. You should–because they aren’t being productive and they encourage your good employees to quit. But, you should first try to counsel and coach and correct. And you should consider your pay scales for your good employees and give raises and bonuses when appropriate because it will cost you more to lose that good employee than the $5,000 raise you refused to give.

Turnover is expensive. Sometimes it cannot be avoided, but when it can, you should avoid it by doing the right things for your employees.

via How Much Employee Turnover Really Costs You | Inc.com.

How Much Employee Turnover Really Costs You

Here"s How To Kill Employee Turnover Before It Kills You

Customer churn–where users engage, disengage, and quickly flee–can kill a company. And as William Tincup argues at OpenView, churning through your team will kill you just as dead.

“Employee turnover can be just as damaging,” he write, “impeding your ability to attract top talent right now, and lessening the likelihood that you’ll retain your highest performers in the long-term.”

The big question, then, is how to build a company where your people love–rather than loathe–their work. Fast Company’s done our best to find some answers.

Hire “tasteful” people

As CEO Tom Preston-Werner explained to us, GitHub is a company that optimizes for happiness–in their employees, in their customers, and other stakeholders. What, then, does a happiness-centric executive such as he organize his work around?

Hiring. Specifically, finding the kind of people that suit GitHub’s “taste,” the aesthetic that animates the social coding company’s libertarian hustle:

For GitHub, “taste” means the same set of values that allows for GitHub’s open autonomy. He reels off a list of feeler questions: Do they care about improving as a person? Do they believe in products? In supporting users? In making developers’ lives better? In making it easier for people to work together? Are they self-motivated? Do they value communication skills? Do they appreciate the freedom to self-direct and make the best possible decision?

If all those questions find a positive answer, he says, then the given candidate will be a positive fit for the company. And positive experiences will emerge.

Give people autonomy

We all hate to be bossed around–so much that it hampers our productivity. This is a signal as to how crucial autonomy is to people feeling positive about their working lives.

Management is great if you want compliance, Dan Pink reminds us, but if we want engagement–which we need for the complicated tasks inherent to knowledge work–then self-direction is better.

Give people resources

While one solid definition of entrepreneurship is doing awesome things with limited resources, people need resources–both in the cases of compensation and in budget–to feel valued, which leads to that all-important engagement.

Give people progress

Perhaps superseding all of these is the need for progress, as articulated by Teresa Amabile, a professor and a research director at Harvard Business School. For people to have their best inner lives–which has the downstream effects of engagement, creativity, and innovation–they need to experience small wins, those little victories that help you recognize that you’re making incremental improvements.

As she’s written before, this suggests that managers don’t need to worry about reading the psyches of their teams, but rather arranging the work in such a way that has clear indicators of progress–progressive techniques include narrated work and other progress-marking rituals. Amabile closes the loop:

By supporting people and their daily progress in meaningful work, managers improve not only the inner work lives of their employees but also the organization’s long-term performance, which enhances inner work life even more. Of course, there is a dark side–the possibility of negative feedback loops. If managers fail to support progress and the people trying to make it, inner work life suffers and so does performance; and degraded performance further undermines inner work life.

via Here’s How To Kill Employee Turnover Before It Kills You | Fast Company | Business + Innovation.

Here"s How To Kill Employee Turnover Before It Kills You