Strategies to increase staff retention

How exactly do you go about reducing staff turnover?

Firstly, you need a way to measure turnover, and to figure out what’s causing it, so you know what best to focus on.

Then you need to look at your hiring practices, including setting clear expectations, so you end up with the right people.

Once you have the right people, then examine the strength of your internal career market and your leadership styles for potential issues.

By combining all of these factors, you will be able to increase your staff retention rate, and improve business performance.

Watch the first video in the series here:

Part 1 – How to Calculate Staff Turnover and Benchmarks

And watch the previous video here:

Part 5 – Staff Turnover Research: Costs, Effects & Statistics

And if you know of anyone who would benefit from this video, please share it with them.

Video Transcript

How to reduce staff turnover

Hi, Andrew from SACS. And welcome to video number six.

In our six video series about staff turnover called Why Do People Leave Their Jobs?

We started out talking about the nature of staff turnover and also how to measure it accurately and some benchmarks about what makes acceptable staff turnover for many organisations.

We talked about whether people know what they’re letting themselves in for when they join you because that can be a driver of staff turnover.

Then the question of whether people are actually good hires.

We talked about push factors and pull factors, things that push people away from the organisation and pull people away from the organisation.

And then we talked about some research findings about why people leave their jobs.

But this particular video is really a summary of what are the key things that an organisation can do to reduce its staff turnover to make sure that it’s within acceptable bounds in comparison with what most organisations would hope would be sound staff turnover.

The importance of good data

One of the things that you’re going to need if you’re going to be able to deal with this properly, is good data.

And in video number one, we went into the question of how do you accurately measure staff turnover?

And in fact, the only truly accurate measure of staff turnover is what’s called the cohort method. And I won’t explain that now.

Go back to number one to find out how to undertake the cohort method, but that will give you an accurate measure of staff turnover.

So it’s worthwhile checking that out and making sure when you benchmark, that your staff turnover is a problem or is it not a problem?

Now, there are some strategic questions involved in that.

Like, for instance, if you need the organisation to go through quite significant change for some reason, don’t be surprised if that drives higher levels of staff turnover than would be normal, but that can be very functional if you really need to change an organisation quickly.

Why hotspot analysis can really help

The second thing we suggest is undertaking a hotspot analysis.

So hotspot analysis is where you measure staff turnover across different parts of the organisation.

So, for instance, it could be certain business units. And if you find that certain business units have markedly higher staff turnover, then that’s a really useful clue as to how to address the question.

You might also find that you have staff turnover during particular tenure periods. And I mentioned that many organisations have high staff turnover in the first year of tenure or the first year or two.

If that’s the case, that also suggests how you might tackle the issue.

So hotspot analysis can also include geographical locations, it can include professional groups, it can include male versus female. It’s a worthwhile thing to do.

Using post-exit interviews

In addition to that, we suggest that you undertake post-exit interviews.

Now, we talked in an earlier video about the whole idea of exit interviews and it is shown that exit interviews, whilst they can contribute some useful data, they’re often wrong.

People don’t tell you the truth on the way out of an organisation. Sometimes they overstate their disgruntlement with the organisation, but very often they understate. Who wants to burn bridges?

So the alternative is to get a third party to undertake what’s called a post-exit interview, where a third party samples, surveys or speaks to people who’ve left the organisation and asks them why.

That will give you very different results from undertaking immediate exit interviews.

Addressing common turnover issues

Post-exit interviews are very powerful and you can act with confidence if the bulk of people are saying this is the issue, we couldn’t get it along with our leaders, for instance.

Okay, leadership development or leadership selection might be the issue.

Develop practical methods of letting people know about the job, team and leader and organisation before they join.

In other words, this is the truth, that many people join organisations and don’t quite know what they’re letting themselves in for. So we use the term work sampling.

If you can, causing people to actually work with you for a while, like a summer clerkship kind of a thing, or working with you for a couple of shifts, if you’re in an organisation that allows that or the nature of the work allows it, that can be very powerful.

But failing that, we suggested in video number three that it’s a really good idea to encourage people to reference check you with your own employees.

To do things like give them an opportunity to really see the truth about what you like, the strengths and the limitation areas.

It’s far better to have somebody say, actually, now that I know I don’t want to join you, that’s far better than to hire them and then have them spin out within six to twelve months let’s say.

How to recruit well

We also suggest that you recruit well – intelligent, engaged, generous, emotionally stable people.

How do you know all of that?

Well, if you’re not using pysch testing, you are committed to having higher staff turnover than you would if you did use psych testing.

I mean, one of the most universal findings of good and valid psych testing is that if it’s applied and if you use the results to decide who you’re going to hire, then that’s going to reduce your staff turnover.

That’s an incredibly consistent result from valid psych testing.

So if you want to recruit accurately and you want to reduce your staff turnover, understanding a bit more about the psychometric makeup, the cognitive ability, the personality, the values of the people that you’re hiring, the resilience, for instance, change-resistance, those kinds of things that can be incredibly powerful in reducing staff turnover.

And then there’s the question of leadership. Good organisations lead well and that reduces staff turnover.

The next slide, I did show this slide in the last video where we showed you a whole bunch of data about staff turnover, but this is just a ranking of the main reasons that we found in 2000 people about why they left their last job.

How to create exciting opportunities for staff

Now, you see the first of these (refer to the video), move to a more exciting opportunity, at first blush, it might seem you have nothing to do about that.

I mean, if they leave you to go to a better opportunity, what can you do?

But in fact, you’re not entirely powerless to stop people leaving you for better opportunities.

One of the biggest problems organisations run into when they have high staff turnover is what I would call the lack of an open and active internal career market.

So maybe if I’m in this area of the organisation and there’s a job in this area of the organisation, maybe the people over here intrinsically and naturally recruit from outside the organisation.

Maybe they don’t consider internal candidates and maybe there are other barriers. Maybe you’ve created a situation where people think, that’s a different division, I wouldn’t get that job.

Creating a vibrant internal career market where you encourage people to grow within the organisation and give them the opportunity to, say, transfer from one area to another.

That can be an extremely powerful way of reducing staff turnover because your best people don’t go outside to get their next opportunity. They can go inside more than they do right now to get that opportunity.

So creating a vibrant career market can help with issue number one, this question of, I left for a more exciting opportunity.

The importance of clear feedback

The second is absence of clear performance feedback. Straightforward, isn’t it?

You’ve got to teach your staff, your leaders, and by that, I don’t mean the executives alone, I mean all of the leaders right throughout the organisation – the team leaders, the business unit managers, the coordinators, the supervisors, whatever you call them.

Teach them to build their capacity, to give people guidance and support and coaching so that they are able to improve their skills and give them clear performance guidance.

Organisations who are good at firstly, managing performance expectations and secondly, managing the behaviours, managing expectations about the types of behaviours that we want to see from employees, those kinds of skills are really powerful to cause people to stay, because they feel proud of such an organisation.

There’s a sense of a kind of discipline, if you want to put it that way. Not disciplinary, but discipline, where everybody knows what the organisation stands for.

And people are often proud of such an organisation, and they stay.

Now, when you don’t do that, what people also tend to feel is, hey, I’m being let down by the fact that this person is not doing the right thing and nobody does anything. Nobody manages that issue.

So clearly there’s an opportunity and that contributes to staff turnover reduction.

What to do about salary issues

The third is, move to a better paying job.

Well, once more you might say, okay, there’s not a great deal we can do about that. One thing I would say is that people often say this when they leave an organisation just because it’s a nice clean way of leaving an organisation.

If they’ve had a fight with their boss, let’s say, or they don’t like their boss, or they feel that the organisation’s a shambles or whatever, if they leave and you say, why are you leaving?

It’s amazing how often they’ll say, well, I got a better paying job because it’s a nice clean reason. It’s not accusatory when you are moving out of an organisation.

But of course some people do leave to go to better-paying jobs. Dollars do not make people more engaged unless you’re paying unfairly.

So my recommendation about this point is to undertake market-based reviews of what you are paying and ensure that you are paying appropriate dollars for the nature of the organisation that you are.

Now if you do that, again, you’ll be making it less likely that you lose staff for reasons of the fact that you’re not paying enough.

Why good leadership is critical for staff retention

The next point is, bad relationship with my supervisor.

Well, as you can see, that’s the fourth most common reason in Australia and New Zealand as to why people leave their jobs and what we’ll be doing is, we’ll be talking a little bit about leadership in the subsequent slides.

But good leadership is an outstanding way of reducing staff turnover.

It’s the number one way actually, because if you’ve got leaders who are supportive, who cause staff to learn and grow, who empower their staff, and who cause their staff to feel that they’ve got a future in terms of career development and growth, and also leaders who are kind and nice and helpful, all those sorts of things make a massive difference to staff turnover.

Certainly in this case you could say that things like absence of clear performance feedback and bad relationship with supervisor.

Well, if you add those two together, you’ve got the number one reason for people leaving their jobs, which is the skill of the leader that they report to.

Five other factors you can actually control

#1 – Then you see job turned out to be different from what I expected (refer to the video). Well I mentioned earlier, exposing people to opportunities to understand what the job is like, that’s really powerful.

#2 – Organisation was perceived to be unsettled/negative environment. Once more. Surely that’s a leadership consideration.

If it’s being led well then you are dealing with an issue where people feel, okay, this organisation is going through tough times, but I feel confident in the leadership of this organisation to deal with that and to manage it successfully.

#3 – Then, work was not meaningful. That’s interesting, isn’t it? Have we recruited the wrong person? Possibly.

Have we not shown them what the job was like before they joined? Possibly.

Have we wrongly constructed the job, which is again a leadership question? So there are some opportunities there.

#4 – And then, job too demanding and stressful, negative experiences with colleagues. So they may well be selection issues. We’ve just hired the wrong people.

If they find the job is too demanding or they can’t get along with their colleagues, it could well be either an issue of recruitment or an issue of leadership.

We’re not leading the situation well enough that people can get along with their colleagues, let’s say.

#5 – And then finally, I left for personal reasons not related to the job.

What I would say about that is that there’s a real opportunity there to embrace concepts like workplace flexibility so that people do have the opportunity to feel that they are supported by the nature of the job and the nature of the employment arrangements.

Why employee engagement matters

I want to talk a little bit about a thing called engagement, and I’m not going to go into this in massive detail.

Engagement, as it’s defined in contemporary research these days and also in the workplace, is really three things.

Vigour, which is the degree to which I bring energy to my work.

Dedication, which is the degree to which I’m committed to my work.

And absorption. Absorption is the degree to which I kind of get immersed in my work when I join my work group.

And I’m getting very engrossed in my work, happily engrossed.

Now, when people demonstrate these three characteristics, they tend to leave the organisation less. And so once more, having a highly engaged workforce is a product of two things.

One, the quality of people that you recruit.

Because certainly in psych testing research, we can show you that people who are naturally generous, naturally smart, naturally easy to get along with, naturally hard working, naturally emotionally stable, they tend, on average, to be much more engaged in their work than people who are the opposite of that, let’s say people who are disorganised, emotional, unstable, not very hard working, those kinds of characteristics.

So if you want to have a highly engaged workforce, recruit well.

Three very different models of leadership

But once you’ve recruited well, then, of course, you need to lead them well, I just want to talk about three potential modes of leadership to create high levels of engagement among staff.

And the first is there are times when leaders have to be top-down. That’s where the leader is acting like a boss.

A top-down leader is somebody who will supervise staff, either individually or in a group.

And that leader will say, Here is what I need you to do. This is not negotiable. They will do it politely. They will do it supportively, but they will say, this is what I need you to do.

And to be a good leader, you must be able to do that.

The second mode of leadership is consultation, and that’s where you will ask people’s opinions.

So you go and ask Mary Smith, you go and ask Bill Jones, you go and ask another person and another person, another person.

And when you’ve heard their opinions, you go back to your office and decide what you’re going to do. That’s consultative leadership.

Now, consultative leadership is in many ways an extremely useful tool in the leader’s toolkit, but it’s not the optimum.

And the reason it’s not the optimum is because if you go out and consult people and ask them their opinion about what you should do, the only people who are really happy with what you do are the people where you have done exactly what they said to you.

And sometimes if you don’t do exactly what they said to you, they think you’ve undertaken model one leadership, you’ve been top-down, you’ve acted like a boss.

Now, these two models of leadership, top-down leadership and consultative leadership, they are the dominant models of leadership in Australia and New Zealand.

Facilitative leadership – empowering staff

But there’s a third alternative, and the third alternative is called facilitative leadership.

And that’s where a leader is actually acting like a facilitator, where these are staff, there are five staff in this group, and you’re getting them together in one spot, and the spot might be a virtual spot, or it might be a physical spot, and you are leading that group to discuss an issue, either a challenge or an opportunity, and then to resolve and vote for what they think should be done.

Now, leaders who do this, encourage people to come up with their own solutions.

And when they do it well, they facilitate a process where the group makes a decision. They don’t make a decision always by consensus.

They might vote on what needs to be done, but then the leader backs the staff in their solution, supports the idea that they’ve come up with.

And by the way, good leaders choose when to be the boss, when to be the consulter, and when to be the facilitator.

And the style of facilitation that I’ve just mentioned is often known as democratic facilitation, where you’re encouraging staff to make up their own minds.

Now, there’s a number of benefits from this kind of facilitated democracy kind of a process.

One of the benefits is that it causes staff to become better at solving their own problems. So they tend to come to you less asking you to solve their problems.

They tend to become better and better at solving their own problems. So instead of coming to you saying, how can I solve this problem?

They might come to you and say, hey, we thought that we could do X, Y or Z. Which do you think is the best solution?

Or can you add value? Or this is what we’d like to do, and they’re just really asking for your support in helping them undertake that.

So that’s one benefit.

Another benefit is that when people do this, measurable levels of engagement are higher because it turns out that empowerment is almost the single most powerful driver of engagement in staff.

And this video sequence is all about staff turnover.

So if you can pump up engagement, you are, in effect, at the same time, reducing staff turnover.

But of course, you get a lot of other benefits of engagement. You get things like productivity.

Both quantity and quality of work increases when you have higher levels of engagement.

Things like occupational health and safety, the workplace is safer when people are more highly engaged.

And also it correlates heavily with real-world outcomes like profitability, revenue growth, customer satisfaction, those kinds of things.

So I guess what I’m saying is leaders need to be skilled up to decide which of these models of leadership to embrace, top-down consultation or facilitative leadership, and they’re choosing wisely when to do this.

What you’ll find is that that will markedly increase the levels of staff engagement and thereby reduce the levels of staff turnover. So consider that.

Maybe that’s something that you can work towards with your own leaders in your own organisation because if you do that, you will be doing everything in your power, provided that you’ve considered some of the other options that we’ve mentioned earlier in this video sequence to reduce staff turnover.

Next steps to improve staff retention

I hope you’ve found some practical tips in amongst all of that.

Please don’t hesitate to move back and forth through the videos to pick up the key points from within.

Thanks for watching and we look forward to speaking to you soon.

Watch the next video in this series to find out more about managing staff turnover:

Part 1 – How to Calculate Staff Turnover and Benchmarks

And watch the previous video here:

Part 5 – Staff Turnover Research: Costs, Effects & Statistics

And if you’d like some help to improve your staff retention rates, contact us to discuss our Psychometric Testing and Workforce Planning services.

 

 

SACS Consulting
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