Reasons to stay - An alternative approach to tackling Employee Turnover
Updated: Jan 23, 2019
The New Year often starts with some trepidation at corporate headquarters on the expected post bonus #employee #turnover. Ways to estimate this and counter it are high on the agenda for CEOs in their discussions with #CHROs at year end. In Asia, this is typically expected after Chinese New Year when most employees have their bonuses in hand and come back fully recharged after the auspicious break.
The true cost of turnover for companies can range from 50 - 150% of the base salary of the departing #employee when you factor in the cost of #hiring, #induction, #replacement as well as the loss of #productivity and business impact of losing them.
Companies have tried to counter some of this "turnover" through innovative compensation strategies in the form of deferred bonus payouts, part bonus deferrals or by placing a higher proportion of total #compensation packages on Long Term Incentives for senior employees. For high performing employees, it is not uncommon to put in place retention payments also known as "golden hand-cuff's" which create secondary payments in addition to #bonus linked to out-performance on sales or other quantifiable targets. These retention payments typically have a deferred payout structure and can lock in employees for an additional 2 - 5 years by monetizing the decision to stay or leave with high percentages or multiples of their total compensation at stake, depending on the role, seniority and industry.
#Market #research however shows that the top reasons for employees to #leave an organization are often non-monetary such as, "#relationship with their direct boss", "lack of challenge in the work itself", "relationship with #coworkers", "opportunities to use their skills and abilities", "opportunities for growth and development", "corporate culture" etc. Issues with compensation often ranks at # 7 or below!
A more effective way to counter the turnover could simply be a well-timed conversation with the employee also known as a "#Stay" #conversation, to understand key #motivators and dis-engagers. Training your managers in having these conversations and following up with tangible and timely actions could prove to be a far more effective #retention #strategy!
According to market #statistics, most employees leave their jobs from early December to the end of March of the following year. Hence, the conversation must happen well ahead of the actual #performance #appraisal or ideally by Q2 or Q3.
Eight Questions to ask in a "Stay" meeting:
Q1: What aspects of your job make you want to jump out of bed?
Understanding what energizes and #motivates the employee is critical information for managers.
Q2: What aspects of your job make you want to hit the snooze button?
Asking about dis-engagers creates early detection on issues that need to be addressed.
Q3. What are you most passionate about? Knowing what your employees are #passionate about can lead to creative solutions and strategies in matching them to roles or projects that could leverage these more effectively.
Q4. What's your dream job?
Although we all know there is no such thing as a "dream" job, knowing what the aspiration looks like creates a pathway for progress.
Q5. What did you love in your last position that you're not doing now?
This is critical information on aspects of a previous role that was valued and may have been lost in the transition to a new role. The trade-off the employee is dealing with and ways to address the issue.
Q6. What makes for a great day at work?
Understanding what elements constitute a great day provides key insights into personal drivers, #values and engagers.
Q7. If you had a magic wand, what would be the one thing you would change about your work, your role and your responsibilities?
This is when you get the honest feedback on what exactly needs to change in the role from the employee's perspective.
Q8. What's bothering you most about your job?
This is where you can get any other issues that may not have been addressed so far.
Let's stay connected and let me know if you have any questions.
Keeping the door open for further discussion is key to building trust and engagement.
Creating retention strategies that are non-monetary entail creating a #culture of conversation, trust and capability. One where every leader in the company takes ownership for the retention of their key talent and this is show-cased at the top of the house by the CEO. While "stay" conversations may not fully replace monetary initiatives, what they will do is create higher employee commitment, lower turnover and reduce the cost of retention strategies over time.
At the end of the day, companies who can create an environment where having the "stay" conversation is not only in the diary but baked into the DNA of the business and culture will be the ones who outperform the competition and get ahead in the race for talent.