3 Questions to Better Understand the Forces Behind Employee Turnover

Here's how to get to the bottom of why employees stay at or leave your company.

In a post What's Your Human Resources Plan? I posed the question:

Which of these is more challenging in your business?

  • Finding great talent
  • Keeping great talent
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By a margin of 2:1, survey respondents said they had more trouble keeping talent. One respondent took the time to point out the heart of the problem in his company:

“We keep investing in our employees, and the competition keeps offering them much better offers. It’s not only about the money, but also the job titles. If we start offering the same to any of them we will end up with 10 managers in each department.”

This comment highlights a few of the frustrations faced by employers who know the value of their employees, invest in them and sometimes end up losing them to the competition.

As with most things related to people and organizations, there can be many variables at play when you are not retaining the talent you most need in your company. Some of them are under your control and others are not. But if you want to begin to understand what might be going on in your company, I suggest you ask yourself these questions:

What do employees think of your culture? Sometimes it’s hard to understand what employees really think about your company. How can you find out what’s on their mind? There are many employee survey tools that can help. Some leaders take time on a regular basis to meet with cross-sections of employees over donuts and coffee to listen to their concerns. Even more informally, spending some time in the warehouse or with a driver making deliveries can be very revealing. No matter how you do it though, you better find a way to listen to what your employees think about your company.

Why do people leave your company? This is a simple question that can be difficult to answer. It is very easy for managers to pin employee departures on compensation and promotions. Certainly, that is part of the answer sometimes. But more often than not, there are other factors in play. Sometimes it involves the style of the supervisor someone is working for. Maybe it’s a perception that a person’s contributions are not valued. Maybe you have a problem with sexual harassment or discrimination that you don’t know about.

Rather than guessing, or assuming you have the right information, exit interviews with departing employees should always be conducted. If you think you are not getting the real story from departing employees in these interviews, find a third party to conduct them confidentially. You might be surprised by what you find.

Are your rewards programs in line with your industry and region? Although compensation is seldom the primary reason for employee departures, it is still an important factor. You should have a clear, accurate picture of how your rewards programs stack up against other distributors in your market, as well as other employers vying for the same talent.

Base pay is important of course, but don’t forget to evaluate health benefits, 401 K plans, paid time off, flexible work schedules, education reimbursement benefits and everything else. And be sure your rewards calibrate to the demographics of your workforce. Twenty-somethings are probably not as interested in the 401K plan as they are in flexible hours and paid time off. Pay attention to the different needs in your organization, and it will help you design more attractive rewards programs.

If you spend some time on just these three items you will start to better understand the forces behind employee turnover – and that will be the first step to doing something about it.

John Salveson has been a consultant in the field of human resources for more than 25 years. He is Co-Founder and Principal of Salveson Stetson Group, Inc., a retained executive search firm with a specialty practice in the wholesale distribution sector. Contact him at salveson@ssgsearch.com.

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