As we begin a new decade, the challenges facing businesses, executive leadership and HR professionals are growing. From societal changes to digital transformation, the trends shaping organizations have HR responsibilities evolving. These issues require fresh ideas and perspectives.
With that in mind, Compensation Alert will periodically feature guest articles from thought leaders in their fields. Our first is from national speaker and trainer Jeff Kortes, founder of Human Asset Management LLC. Jeff helps organizations recruit, engage, develop and retain talent.
Employee retention is the biggest challenge organizations will face in the next decade. The reality is that Baby boomers are retiring at a rate of 10,000 per day. There are simply not enough people to take the spots of the people that are retiring.
Trying to find replacements is difficult and costly, so when you do find them you need to be able to retain them. As an employee retention speaker and trainer, I have worked with organizations to address their employee retention issues. They cite various reasons, including:
The first and most frequent reason is money.
The bottom line is that having a revolving door of people costs an organization a lot. Those costs drop right to the bottom line.
One of my clients, a metal casting company, determined that it was costing them hundreds of thousands of dollars to hire new employees, train them and ramp them up to the point where they were producing quality parts. The owners were turning down sales because they didn’t have a fully staffed plant due to their employee turnover. To address the situation, they took the approach of:
- Educating managers on what drives employee turnover,
- Getting managers input on how to address those drivers in their organization, and
- Taking certain key actions to improve job satisfaction.
These actions helped them reduce turnover by approximately 30% in the six-month period after our employee retention workshop.
Another compelling reason is the stress that employee turnover puts on the people who lead their teams and their departments.
In this case, the supervisors and managers who were leading the people in the organization were so stressed because of the constant turnover that they were experiencing that it was starting to take a toll on them emotionally.
The HR Director and the VP of Operations saw the toll it was taking on these leaders and realized it was not sustainable in the long run. They also realized that the reason that much of the turnover existed was because of the way their supervisors were leading.
As a result, they embarked on a six-month leadership training program to educate leaders on how to lead Millennials and Gen Z employees so that they wanted to stay with the organization.
Beyond starting to reduce the stress of excessive turnover on the supervisors and managers, they are also experiencing operational gains because of the change in leadership style.
Lastly, and most importantly, another reason for addressing the issue of employee retention is organizational survival.
When you can’t keep the people you need to run your organization and your competitors can, you are out of business. That’s reality. In the next decade, we will find that organizations that don’t get a handle on their employee turnover will find themselves unable to compete. When this happens, an owner’s years of working to build a business will be flushed down the toilet or stockholders will suffer massive declines in the value of the business.
One manufacturing client in a rural area with a 1.8% unemployment rate was simply running out of people. They had to stop the employee turnover, or the business would be in jeopardy.
Using a combination of an employee retention workshop to get buy in from supervisors and managers and a focused kaizen event on employee retention, the organization saw a significant drop in employee turnover in the next year so that they now have a stable workforce. In fact, they were not only able to survive but are now able to grow.
Regardless of the reason for embarking on an employee retention initiative, delaying the inevitable impact of employee retention is sheer insanity. The key to attacking employee turnover is to recognize that if you don’t take focused action, the issue is not going to go away.
The days of thinking that you can simply replace people are gone — long gone. And, the reasons for taking action are compelling ones. Clearly, it’s in the best interest of any organization and the leaders who must bear the brunt of turnover to act on this compelling business issue.
About the Author:
Jeff Kortes is a recognized speaker and trainer who helps organizations recruit, engage, develop and retain talent. Founder of Human Asset Management LLC, he has more than 25 years of experience in human resources working with companies including ConAgra Foods, SPX, Midas International and American Crystal Sugar. He is a member of the National Speakers Association (NSA) and the author of several books including: Give Your Employees C.R.A.P., 7 Other Secrets to Employee Retention, and HR Horror Stories…True Tales from the Trenches. For more information, contact me at firstname.lastname@example.org, 414-305-9626 or visit http://www.jeffkortes.com.