From turnover to retention

So what do we know at this stage? We know that staff turnover is costly and disruptive to an organization. It is estimated to have financial impacts in the range of 30% to 250% of a worker’s annual salary. While no business can realistically expect zero worker attrition, it is important to measure the rate of turnover to indicate if retention strategies are working.

The video above is illustrative. It is a sped-up video of people walking to work across a bridge into Canary Wharf in London, UK. It contains no audio.

Workforce turnover measures people leaving the workplace in a certain period, usually on an annual basis. Turnover can be voluntary or involuntary, but all people leaving the workplace contribute to a total turnover measure, usually reported in percentage terms. After calculating the worker turnover rate it is advised to compare it with the industry sector average.

Turnover statistics can help inform retention strategies.

Creating a retention strategy

A sound retention strategy should address three key elements:

1. Performance
Clear, achievable objectives that gauge personal, team, and organizational performance provide the feedback workers need to confirm that they are making valuable contributions and accomplishing desirable goals. The benefit of having measurable objectives for workers is fairly obvious to most business owners and managers, but this perception usually stops short of relating performance metrics to worker retention. Study after study confirms that people have a deep desire to feel they’re succeeding and that their talents and capabilities are being used to make a difference in the business.

2. Communication
Retention is closely linked to how workers feel about their performance, the organization and their work environment, so the question becomes, “How does HR know how the workforce feels about these matters?” An effective and sensitive communications plan can provide HR insight into what drives worker morale and how staff members feel about the organization.

Questions to ask the HR department include:

• Does HR frequently communicate with workers?
• Are there regular meetings with workers?
• Is it two-way communication, and is there a non-threatening channel for both parties to offer comments and suggestions?
• Does HR conduct employee surveys to gather opinions on organization issues and activities?
• Are managers and supervisors good listeners?

3. Loyalty
Building loyalty in staff results from relationships based on trust, respect, and commitment to each other’s best outcomes. When demonstrated, workers will reciprocate with commitment and loyalty to the business. To this end, workers do not begin their employment with the organization as loyal workers. Still, they will develop loyalty over time as they are trusted, respected, and appreciated by the organization. HR and managers can ask questions to gauge the level of loyalty within an organization, including:

• How does the organization demonstrate commitment to its workers?
• How loyal is the organization to its workers?
• Is the organization concerned?

Optional task

At the bottom of this step is a link to learn how to mathematically calculate the staff turnover rate each month in your organization and plot this. If you have the information to do this, give it a go.

It’s important to understand not just how many staff left but why they did. Does your organization collect this information already via an exit survey? If you have this information plot the stats into two headings. If you don’t, consider how you might want to start collecting this information.

Involuntary loss of job – retrenched (includes business closed down) – seasonal work ended – own ill health or injury – dismissed

Voluntarily left a job – to get a better job or wanted a change – poor work arrangements, pay, or hours – family reasons – retired – holiday job and/or returned to study – to start own or new business – other (includes businesses closed down)