Is Management to Blame for Staff Turnover?
I was asked a question on LinkedIn and this is a brief outline of my answer that I thought those in my network might find interesting
For many people there is a direct relationship with management
capability and high staff turnover. In my opinion, however, there also needs to be other
considerations before one always blames team managers.
I will often talk to CEO’s and team managers about their “Poach rate”. This
is a calculation that identifies the increase in the current salary that a competitor company has to pay to lure talent away and is represented as a percentage of the salary. The higher the percentage (around 10-15%) the more money has played a part in a person moving jobs. The manager may have little control over this given that pay scales are decided centrally.
If the Poach rate is less that 6% then the cause of the talent leaving is unlikely more likely to be poor culture, lack of training, lack of career structure or poor management style. In this circumstance the Company is responsible for driving away the staff member and if turnover is high then significant attention needs to be paid to these other factors.
Another aspect to why people leave a job is to consider the individual’s circumstances:
Young talent will look to improve their resume (CV) and will remain in a job for as long as they are learning, working on new projects and that the company continues to deliver value to their resume etc.
As soon as another company is identified as providing greater value then the young talent will
leave.
Talent aged 30 -50 may be seeking to maximise earnings or responsibility and if this is not available within their present position will seek to move. (Team managers often have little impact upon career ladders)
Over 50 talent will often seek to reduce responsibility and the time spent at work (once again the team manager has little impact on this area)
Too often, in my experience, blame is placed on “Salary” as a reason why talent leaves when in fact the real reasons are in the company’s power to prevent. A motivating statistic is that when a talented individual
leaves the RISK that further talent will follow increases by 50%.
Mission Critical strategies for the Downturn
I was asked a few days ago what I felt were the the “mission critical strategies” that a business should employ for survival during the downturn.
The first piece of advice that I gave was not to be panicked into knee jerk reactions. Panic inevitably results in poor decision making and poor decisions inevitably leads to long term regret.
The answer was then expanded into six key areas:
1) Plan for a long downturn. It’s likely that things will be slow for between one year and five. (in Japan their last recession lasted a decade)
2) Focus on productivity.(Both individual and team delivery)
3) Retain the best talent and continue to develop it. (Historically, talent tends to leave when it believes it is not learning)
4) Encourage innovation
5) Ensure robust succession planning so that if people do leave there is continuation of productivity.
6) Reduce expenditure as far as possible on non-productive items