As the economy turns around a surge in job vacancies rise and recuitment companies are on the prowl. Baby boomers steadily move into retirement and Generation X and Y are increasingly known to jump ship at the first opportunity. Managers increasingly miss the boat perceiving the reasons for leaving are 'pull' factors rather than the initial 'push' that set the employee on the exit ramp.

Research tells us there are common misconceptions about the root causes of employee-initiated turnover, with 89% of line management believing it stems from ‘pull’ factors – such as better pay or career opportunities - rather than ‘push’ factors that occur long before employees start looking for greener pastures. Organisations that keep ahead of these realities and take appropriate action will reap the rewards of sustained competitive advantage and enhanced organisational performance.

The causes of employee turnover are hidden from the very people who need to be aware of them, the managers.  The vast majority of managers believe that the root causes are pull factors - better opportunity, better offer, more pay. They fail to perceive that it is the push factors, often within their own power, that initiate the disappointment and disengage the employee, who then opens the door to outside opportunities. As a result many organisations are still relying on tangible, easy-to-implement solutions revolving around pay and benefits and trendy perks. In reality, the most effective solutions involve more challenging intangibles such as good management and a culture that fosters commitment and recognition.

Disengagement Happens First After Some Turning Point Event

Voluntary employee turnover is almost always preceded by a period of disengagement from the organisation. Dr Thomas Lee, a Professor at the University of Washington, conducted extensive research on what he calls the ‘Unfolding Model of Turnover’. He reported that most employee-initiated turnover starts when the employee experiences a shocking or jarring event. Adding weight to this, Leigh Branham’s highly acclaimed book ‘The Seven Hidden Reasons Employees Leave’ uncovers research from the Saratoga Institute’s database of 20,000 exit surveys. The results from the question ‘What caused your initial dissatisfaction?’ had exactly the same weighting and priority as the results for ‘What what was your actual reason for leaving?’. Lee points out two distinct points in an employee’s thinking: the  turning point event and the actual decision to leave. It is the period between these points that provides hope for the early intervener. Dr Lee emphasis’s that exit interviews that do not uncover the turning point event and get the employee to discuss the deliberation process will not reveal the root cause.

But how can organisations pre-empt this turning point or, after the event, ascertain what it was? It’s often been said that people don’t leave organisations, they leave managers. “Study after study supports the fundamental truth that an employee’s relationship with his supervisor largely determines his view of the company. When the manager is seen as living out of the company’s vision and priorities, and taking an active interest in the employee’s assimilation and growth, loyalty to the company soars. Alternatively, the top reason employees resign is because they don’t get along with their boss,” writes Loren Gary in her article ‘’People Want to Work for You, Retain Your Best People’’. (HBSP 2006). 

Some forward-thinking organisations are making employee retention the direct responsibility of managers. Paul Michelman’s article ‘’Why Retention Should Become a Core Strategy Now’’  (HBSP 2006) cites some organisations ‘’who view managers’ roles as so important to retention that they have established clear responsibilities and goals in this regard, including tying variable compensation to retention rates, but also rewarding managers who help good employees leave their groups for other jobs in the company, rather than holding them back and thus eventually losing them to outside firms”.

A recent study and report by Monster Intelligence, ’Retention Strategies for 2006 and Beyond’, concluded that the best recommendation for employers trying to retain staff was to make direct managers  more accountable by tying their compensation to retention performance.

This new wave of management performance culture is challenging and daunting, given the realities of external forces. These include the lowest unemployment rate in three decades, the skills shortage, the increasing number of baby boomers moving into retirement and the fickle new generation that is Gen X & Y. Managers will be under greater pressure to attract the right people, recognise early warning signs of defection and  ensure their employees get what they want.

Workforce Retention has developed RECAP™ (Retention, Engagement & Commitment Assessment Program). This is powerful diagnostic tool that builds a unique profile of each individual as they enter an organisation. The web-hosted profile sets out their priorities and records how they regard key aspects of their job, team, manager and environment. This is done through a line of questioning based on seven intrinsic needs: Meaningful Work, Growth Opportunities, Being Valued, Being Respected, Recognition, Responsibility, Support and Trust. The information is captured independently, encouraging greater candour. It is done in such a way that it reveals how individuals uniquely characterise and prioritise each need. A one-page profile is accessed by their immediate manager via a web link, providing a heads up on what to expect and how best to manage the employee’s needs.  This process is repeated six months later to capture the employee’s satisfaction rating. The data from each process is compiled to reveal significant gaps in satisfaction. A ‘retention index’ and an ‘engagement’ index is included, alerting management to disengagement and high flight risk.

Notes:

The Seven Hidden Reasons Employees Leave, AMCOM Books 2004

Retention Strategies for 2006 and Beyond 2006 – Winter 2006, Monster Intelligence, 2005

People Want to Work for You, Retain Your Best People, Loren Gary, Harvard Business School Press, 2006. 

Why Retention Should Become a Core Strategy Now, Paul Michelman, Harvard Business School Press 2006