Reducing Turnover in Today’s Job Market

It’s late March and many startup boards and leadership teams are showing signs of fatigue from the unrelenting competition to hire candidates for open positions. Executing the 2022 plans that were finalized in January (see prior blog post on this subject) for many companies has involved both hiring for new positions and filling existing slots left empty by turnover.

As recruiting and hiring efforts grind on, leadership teams realize that there are other important initiatives that require immediate attention in order to make their 2022 plans. These include:

• First and foremost, reducing turnover,

• Analyzing compensation packages in light of return-to-work and the latest market conditions,

• Examining company-wide flexible work schedules and the now “standard” informal work arrangements, and

• Scrutinizing paid time off (PTO) policies.

To reduce turnover, companies are using a combination of tactics, including:

• Firing people who don’t fit,

• Augmenting compensation and benefits for key performers

• Encouraging pro-social behavior – i.e., acts of connection and appreciation – among employees,

• Doing more morale-boosting activities (e.g., drinks on Friday afternoon over Zoom) more frequently,

• Offering flexible work hours and other informal working and PTO arrangements,

• Paying closer management attention to absenteeism, employee engagement and employee job satisfaction,

• Researching and offering more opportunities and formalized programs for career development and growth, and

• Other plans and creative solutions.

This is all very positive. However, the starkest wisdom that struck me related to reducing turnover came from an HR director during a recent Zoom meeting.  On that call, she said:

“People don’t leave companies. They leave their managers.”

Many of the initiatives listed above have been developed and deployed to address high performers, at-risk individuals, or key workers who announce that they are taking another job. Addressing managers is absolutely essential.

According to Gallup: Fifty-two percent of exiting employees say that their manager or organization could have done something to prevent them from leaving their jobs.

So, what is to be done? Executive leadership teams should consider the following.  

• Nip problems in the bud by encouraging managers to connect with top performers on a regular basis. Doing so enables managers to discern turnover notions early enough to take actions to prevent unwanted departures.

• Train managers to elicit and receive feedback from their employees at regular intervals.  Institute flexibility versus rigidity into the workplace, and encourage managers to advocate for their people.

• Direct managers to assess workloads realistically, address imbalances, and strive to avoid burnout situations.

• Compel managers to provide employee recognition, encouragement and ‘mission moments’ in regular and special meetings.

• Coach managers to help mediocre performers find pathways to improvement, and to envision a solid, positive future within your organization.

• Empower freedom and decision-making authority, and encourage managers to find creative solutions to workload related challenges among their direct reports.

Of course, attracting, hiring, and retaining top talent has always been a key ingredient to a company’s overall competitive effectiveness.  However, a whole range of factors are combining to make human capital management more important than ever. There are younger workers with different ideas about the right work-life balance. There is a growing sense of permanence around the work-from-home model. There are new expectations that employees have for their employers. And there are post-pandemic workplace dynamics that undoubtedly will continue to unfold for years to come.

To succeed in this market, companies need to focus more on their people. That’s especially true when it comes to developing and keeping good people. Taking proactive steps to minimize unwanted turnover is a great place for employers to start.