Top talent leaving is the second leading business problem we highlight in our latest eBook Fierce Insight Into 6 Leading Problems Businesses Face Today—And How to Solve Them.
Turnover and retention rates vary by industry, and from one organization to the next. While we can't make sweeping statements about what your ideal rates should be, it's safe to say that the fewer valuable employees you lose the better!
What Organizations Lose When Talent Leaves
When superstars leave, they take their talent with them, and seeking out new talent costs companies time and money.
According to the Bonusly turnover calculator, when an organization of 500 employees—with an average annual salary of $65K—loses 90 employees over the course of a year (a turnover rate of 18%) that company will be spending over $3,000,000 in turnover costs. This is calculated from industry averages for how much it costs to find, hire, and onboard a new employee. Ouch.
And this is just the monetary detriment. On a more human level, consider that every individual who contributes to your team or organization brings a unique lens that helps the organization grow and succeed. Once they're gone, you lose their perspective, their skills, and their creativity. Although companies can seek out a fresh lens and new talent, it can also be said that in some sense, no one is truly replaceable.
When you find a good egg, you want to make sure your organization is doing everything it can to keep them. New opportunities are one thing, and it's important for leaders to encourage employees to live out their dreams, whether it's with your company or elsewhere. However, it's another thing entirely when an employee leaves because the conditions or culture of an organization are unhealthy.
An Ounce of Prevention
If companies want to reduce the massive amounts of money they're spending on turnover costs, they need to address why talent is leaving and shift their priorities to accommodate employee needs.
Old-school retention tactics such as competitive salary, stock options, and cash bonuses are not necessarily key motivators for keeping top performers anymore. While monetary incentives continue to play a role in career decisions, there are a few factors that are even more important to employees than income, including growth and a healthy workplace culture of ongoing feedback.
In our eBook, we recommend three Fierce programs for addressing the common business problem of losing top talent: Delegation, Foundations, and Feedback.
Let's take a look at just some of what these conversations make possible and how they reduce turnover.
1. Develop skills on your team – If your organization can effectively meet the employee need for skill development, they won't have to venture elsewhere to meet it. When leaders know how to delegate effectively, they assign new tasks to their teams without burdening them by asking: "In what areas do you want to grow?" Delegating across your team also ensures that workloads will be able to accommodate change if an employee does decide to leave.
2. Put a stop to micromanagement – Statistics show that employees leave their managers more often than they leave their companies. A big contributor to employee dissatisfaction is micromanaging, where leaders try to control others' work with even the smallest tasks. The issue that often underlies micromanaging is a lack of trust on the part of management or leadership. When there's an issue of trust, culture suffers, and employees leave. Effective delegation allows leaders to assign tasks in a way that allows their teams to grow, create clarity around roles, and end the cycle of micromanagement while simultaneously increasing trust and accountability.
3. Create a clear path for development – When employees have the opportunity to learn and develop their skills, it meets their need for growth. Providing new opportunities and having a framework to communicate it reduces turnover costs by providing charted avenues of growth and instilling a greater sense of purpose, where employees can actually see and get excited about where they're headed.
1. Identify mokitas – Mokita is a Papua New Guinean term for something that everyone knows but no one talks about. Papua New Guineans measure the health of their tribes by how many mokitas they have. The fewer mokitas, the healthier the tribe. In America, we often refer to it as an elephant in the room. Learn how to talk about difficult topics in a way that can strengthen the relationship and improve your company culture. The healthier the culture, the more talent your company will retain.
2. Identify and enlarge your perception "filters" – We often come to conversations with our own contexts—the filters through which we see the world. These filters are made up of our beliefs, life experiences, and preconceptions. Recognize the biases present within your own filters and how you can overcome them for better, more meaningful conversations. By enlarging your perception filters, you'll have the ability to strengthen relationships within your organization and contribute to a healthy culture that employees want to be part of.
3. Establish a new definition of conversation – Undo old assumptions, spark new insights, and lay the groundwork for transformation across your organization. Establishing a new foundation requires a shift in how leaders and their teams look at relationships, conversations, and results. A healthy culture starts with a healthy framework, and talent will be drawn to—and want to stay with—a company that invests in its own foundation.
1. Build trust through transparency – If you were doing something in your work that wasn't working, wouldn't you want to know? When leaders and their teams know how to give and request feedback, it builds trust by getting everything out in the open. Retain talent by creating a healthy culture of candor where employees can grow and establish strong relationships built on trust with their leaders and each other.
2. Use positive feedback to create results – Positive feedback relays the message, "This is great, keep it up!" and reinforces the behavior. When we know what we're doing well and let others know what they're doing well, we keep doing it, and it leads to results. Employees crave ongoing feedback as an essential part of their growth, and with continued opportunities for both growth and acknowledgement, employees will have what they crave. Learn how to provide feedback in a way that is well-received and leads to improvements in performance.
3. Request feedback to improve performance – In many organizations, feedback is unfortunately given from the top-down only. Fierce Feedback flips this notion on its head and reveals effective ways to turn feedback into a two-way conversation. This invites not only leaders but also their employees to request and provide feedback. This two-way street provides opportunities for growth for everyone involved, allowing all voices to be heard and creating a culture of candor and ongoing feedback where talent can thrive.
These Fierce programs provide organizations with how to build a culture that attracts and retains top talent by providing more clarity, purpose, and ongoing feedback.
Download the full eBook here for more insight into top talent leaving and other leading business problems.