Wednesday, January 19, 2011

Your Employees Are Quitting You - Part 2

In my last entry, I noted the fact that 90% of the people who leave an organization say they are leaving for more money or a better opportunity. Yet, when contacted by an independent agent, 78% of them cite reasons other than money or opportunity as their reasons for leaving. In other words, 78% of the people who leave your organization (more than 3 out of 4) are relatively happy with their pay and opportunity, but still decide to risk the unknown and take a job elsewhere.

This is especially surprising when you consider that nearly 80% of Americans are risk averse when it comes to their jobs and lives. That’s right, nearly 80% of Americans will live with some sort of pain or problem rather than change things to try and fix it. Yet, here they are leaving your company; taking with them knowledge, experience, and customer relationships, rather than trying to resolve whatever issue they perceive in your organization.

Why would they do that? Why do they risk the great unknown of a new job and new company when money and opportunity are not the driving force?

It’s simple. They are trying to get away from you. Or at least get away from your front line managers.

When 78% of the people leave a job for something other than money or opportunity, they are not fleeing toward something specific. Instead, they are running away from their current situation. By going to a new job or a new company they are not necessarily moving toward something that they know is better, but they believe that it certainly can’t be any worse. They are fleeing with the blind belief that wherever they end up can’t be any worse than where they are now.

It depresses me to even write those words!

As I talk with managers about employee engagement and turnover, a couple of things become crystal clear to me. First of all, most managers don’t understand what employee turnover actually costs the organization. In fact, they often believe that turnover can be good for them from a budgetary perspective.

One manager described it to me this way. “I’m judged on how well I manage my budget. When an employee making $40K a year leaves my organization and it takes me two months to replace them, I’m actually saving $7000 in my budget because I’m not paying them. My bonus percentage is based on how many of my goals I make and last year I made my budget goal because employee turnover saved me money!”

From a very narrow perspective, this line of thinking actually makes sense. Of course the flaw in this logic lies in its micro view of the departmental budget versus the macro view of organizational profitability. But this manager beamed proudly at having saved the company money.

In a way, it’s a shame that this manager doesn’t have a line item on his departmental budget to capture the costs of HR having to advertise, interview, hire, and train his new employee. Those costs alone will more than eat up that $7000 in payroll savings, without regards to the knowledge and history lost when employees leave an organization. Of course, when I pointed out these costs to this manager he just smiled and shrugged.

“That’s not my problem” was his response.

Of course, at that moment the reason his employees were quitting him was really quite apparent. But, we’ll have more on that next week.

At ECI Learning Systems LLC, we are dedicated to helping companies get the greatest return from their most valuable asset: their employees. We work with you to align 3 key organizational factors:
• Your Company Culture
• The Leadership Styles of your key managers
• The Expectations of your Employees

When these 3 factors are aligned, you create an energy in your company that improves productivity, reduces absenteeism, increases creativity, and positively impacts your bottom line. Contact ECI Learning Systems LLC today to get your free Workplace Evaluation.

Until next time....

Dave Meyer
ECI Learning Systems, LLC

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