Employee Turnover: Where Do Employers Miss?
Bilal Ahmad Rather
Lecturer, University of Kashmir North Campus.
*Corresponding Author E-mail: roomira@gmail.com
ABSTRACT:
Despite enormous research and total restructuring of people policies in yesteryears, organizations still confront the problems of employee stability. This study has been undertaken to know where the 21st century employers miss on employee retention, or put it rather simple, why people desert an organization.The study is based on author’s half a decade long personal observations at different Industries in India. Further it takes the recent statistical data from various authentic sources available online and in print. The study brings out the exact spots that an employer needs to target to combat the turnover problems. The study bases its discussion on the fact that needs are not static, they evolve over time. Consequently, employers need to relearn the need philosophies behind motivation.
KEYWORDS: Employee stability, Retention, Needs, Turnover, Attrition
1. INTRODUCTION:
Living in the era of war for talent, organizations don’t leave any stone unturned in developing strategies to attract and retain the top performers. While every business wants to stay a fresh and ensure they are recruiting the best talent available, going through the recruitment process simply because your employees will not stick with you is something no business can afford (Kelly Services, 2011). Every effort is being made to optimize the workplace like never before. Offering new perks, not-just-money policies, designing flexible workplaces – are some ways to work towards these strategies. The goal is to have low staff turnover to maintain consistency in the work force and develop more skilled employees (Kristen May, 2011). Despite all of these efforts, some loopholes remain there and people don’t find it a happier place. Every organization is not the great one to work with.
There are obvious reasons that become extenuating and break us down, and the only option we are left with is to start afresh. Everyone has good and bad days at work, but when an employee has too many bad days, he or she may start strategizing to leave that job behind (Kate Anania, 2016). Our purpose in this study would be to know what leads to the bad days at work.
There are enough reasons that generate the feeling of “not worth doing” in an employee. These could be what author calls the “Shared” reasons that are common to many employees. These reasons have been discussed by almost all major researches on the subject (see, Annamarie et.al, 2016, Tom Gimbel, 2015, Benjamin, 2015, Renee Sylvestre, 2012). A medium profile bank, for instance needs to conduct a recruitment drive for its clerical level posts every six months. The bank is worried about the hire and training costs it incurs every time it recruits new people. A team of experts worked out the most common reason of attrition being the Salary. The team found that the bank is not meeting the industrial standards and the rivals have more to offer for similar profile. Other shared reasons like this one are generally a result of organizational incompetency – arising out of insufficient resources, inefficient decision making and lack of employee retention strategies. It is worthwhile to mention here that the leading studies on the subject show that most of the employees desert an organization because of the shared reasons, not the other ones that we call as “Personal” reasons. These (Personal) reasons are people specific and do not appeal to masses. They exist in almost every organization, even the best global employers to work with. For instance, not every employee gets married and relocates to a different place. Neither does everyone move on higher studies. These are some rare reasons having nothing to do with organizational efficiency and employer should not be much concerned about these. The workers involved here could be the most talented ones on the floor, but you will just have bear them leaving. There is nothing much an organization can do to stop such kind of attritions given to the fact that such reasons are highly intensified arising out of life decisions. We call them “Unavoidable personal” reasons. However, there are many personal reasons of exit that an organization should be worried about and we call them “Avoidable Personal” reasons. The author calls them avoidable because they don’t affect the employee’s decision right away when he encounters them. Rather these reasons take time to develop as much intensity as to make him quit, and if rectified well in time, they are not the reasons anymore. Your top performer, for instance gets bullied at work – obviously not everyone gets bullied. He may live with it until he finds it totally insulting and unbearable.
Employee retention is not just the function of HR department anymore. The organizations work in a holistic manner these days, knowing that every department contributes to the kind of work culture they may have at work. So, every time an employee quits, the onus doesn’t just lie on the people policies. He may as well not be happy with the housekeeping. Further, fed up with the computer breakdown and application hang up, he may as well be complaining about the IT section. These things affect the psychological experience of meaningfulness, safety and availability, that in turn influences the engagement (see Kahn, 1990;May et al., 2004)
2. SHARED REASONS OF ATTRITION:
Based upon the broad empirical support, the study lists four major reasons contributing maximum to the employee turnover problems. The study would also list some avoidable personal reasons that an organization needs to keep an eye on, knowing that if such reasons are not checked, they may take the shape of major (shared) reasons.
2.1. MANAGERS:
The front line managers are the primary point of contact for operational level employees and they turn out to be the major reasons of attrition. We place them topping the list because we want employers to deal with this reason preferentially. People don’t leave jobs; they leave managers (Buckingham et.al. 1999). A bad manager is a big factor in employee performance. A good manager, no matter the salary, will inspire loyalty (Renee Sylvestre, 2012). In a market where higher pay remains the number one motivator for job change, a significant proportion of turnover (48%) is attributed to poor relationships between employees and their supervisors (Sylvia Vorhauser, 2012). An inspiring manager knows his job and knows his people. Bad bosses can discourage their staff (Tom Gimbel, 2015). Kate Anania (2016) quotes Leigh Branham, founder of the consulting firm ‘Keeping the People Inc.’, that “"Too many managers have never been well coached themselves, Lacking a good role model, they either give no feedback and coaching at all or [they] revert to the ‘YST’ model – yelling, screaming and threatening.” Benjamin Snyder (2015) in his article “Half of us have Quit Our Job Because of a Bad Boss” refers to a Gallup Study, finding that about 50% of the 7,200 adults surveyed left a job “to get away from their manager.” The same Gallup Study was referred to by Lauren Weber (2015) in his article “What Do Workers Want from the Boss?
2.2 RECOGNITION:
The element of recognition is one of the biggest missed opportunities by managers. In our study we found some authors using the rewards and recognition interchangeably. It is worthwhile to mention here that rewards are often in the form of spot awards or cash incentives. While as recognition is non-monetary. We argue that recognition enhances the team performance, not just that of an employee given the recognition. The argument is consistent with a field research conducted by Tinbergen institute, university of Amsterdam (see Christiane Bradler et. al. 2014). A simple and formal act of recognition could be to ask an outstanding member of a team to stand up so that people around can applaud him for the outstanding work. The high end achievers would always demand feedback about their performance. Not always because they doubt their efforts, but they want you to know how well they are doing.Workplace recognition motivates, provides a sense of accomplishment and makes employees feel valued for their work (Annamarie et.al. 2016) and conversely, employees who find their work being taken for granted are most likely to desert the workplace. If you've worked hard to get the best possible people on your staff – that ones most desirable to your competitors, needless to say – you don't want to lose them due to situations you could prevent. One of the ways to prevent this from happening is to give them recognition (Kate Anania, 2016). A Gallup Workplace Survey reports, that employees were asked to recall who gave them their most meaningful and memorable recognition. The data revealed the most memorable recognition comes most often from an employee's manager (28%), followed by a high-level leader or CEO (24%), the manager's manager (12%), a customer (10%) and peers (9%). Worth mentioning, 17% cited "other" as the source of their most memorable recognition (see Annamarie et.al. 2016).
2.3 ENGAGEMENT:
A workplace has to be obsessed with the employee engagement because performance is linked to it. As Sylvia (2012) rightly says, “Engaged workers are more productive, perform better, motivate others and, perhaps most importantly – Stay.” The employees should be taken out of schedule and given a chance to meet the higher-ups. Quoting Lauren Weber (2015), Gallup found that workers whose managers hold regular meetings are three times more likely to be engaged—that is, feel involved in and enthusiastic about their jobs. Despite the desperate attempts of global employers to get to the goal of employee engagement, the reality is that only 13% of employees worldwide are engaged (see Marco Nink et.al 2016). Further as Aon Hewitt (2013) reported that four out of every ten employees they surveyed were not engaged, and two out of ten were actively disengaged.
Many organizations still believe in annual appraisals and speak to their employees once in a while. However, McClelland (1961) in his book ‘The Achieving Societies’ writes that the high end achievers need the regular feedback and they demand for it because it enables measurement of success, which consequently improves engagement. Companies, such as Deloitte, Adobe, Accenture and General Electric are abandoning their annual review processes because they have found them to be ineffective at improving employee performance or engagement (Amy et. al. 2016).
2.4 GROWTH:
Employees often feel their job has little or no room for advancement. Such employees are likely to exit if they are not explained the future prospectus of their work. The research (Kelly Services, 2011) shows growth concerns as one of the top five reasons why employees leave the job and recommends that employers should work with employees to understand each individual's career expectations and where possible design a clear, step by step development path to achieve these goals. When there is no upward mobility, it means you are not going anywhere, no matter how hard you work.
Visibility is paramount – people need to own their career paths and understand what qualifiers and steps need to be taken to achieve their career goals. Apparently when there is no growth opportunity, the word career seems useless to an employee (Sylvia Vorhauser 2012). She further quotes a 2012 survey by Catalyst showing that 78% young Indians aspire be to senior executive and/or take CEO roles, and they’re very impatient about getting there. Such kinds of people are likely to desert the organization that speaks no growth.
2. 5 MONEY:
Money continues to remain one of the prime motivator at job and it is more so about the beginners or Millenials. The statistics show that only small percentage of Indian workforce has tertiary qualification and out of them only 15% are of global standard (Sylvia Vorhauser, 2012). The study further says that India needs an estimated 2,735 additional managers each year, and only 1,740 are in the pipeline. This dearth of skilled people gives employees the considerable bargaining power and options to choose from. Consequently, if your salary structure doesn’t satisfy them, they are more likely to switch.
For the medium profile employers who can’t compete with the high paying giants on salary structure, the alternative could be to build long term relation with the employees and work towards their engagement. In fact, money tends to be one of the worst reasons to leave (Tom Gimbel, 2015). Tom further says that, People who stay with a company and build long-term growth and success make the most money in the long run. They give themselves time to develop and work their way up the ladder. It’s the job-hoppers who typically earn in smaller increments and struggle to ever really become an expert in their role. Plus, when times get tough, they’re the first ones to go.
3. AVOIDABLE PERSONAL REASONS:
3.1 POLITICS:
Politics as many experts say is acceptable to some extent, for it brings competition and creativity among employees. However many organizations seem to lose control on it and people play it for their interest resulting in manipulation and maneuvering of people. An employee who is not politically active doesn’t even know how to get his work recognized and could lose the credit altogether. We often see people underperforming, given to their inability to keep up with office politics (Bilal, 2016). It is to be noted that the employee under consideration could be highly productive and talented, but his lack of political power may result in his work being attributed to someone else. As Abraham Zaleznik (1970) says, what occurs here is an erosion of confidence which ultimately leads the individual to doubt himself and undermine the psychological work which led him in the first place to internalize authority as a prelude to action. Such employee is most likely to start afresh somewhere else, if things get repeated.
An organization has to make sure the deserving employee gets the credit of his work. A couple of political maneuvering incidents could change the thought process of the masses, which is not the best position an organization could be in.
3.2 SOCIAL PROOF:
The concept of social proof as proposed by Ben Eubanks (2011) is certainly at play when it comes to attrition facing an organization. Ben explains Social proof at its core is simply this: We, as humans, like to ― go along. When we don‘t have a strong idea of what the right answer is, we look to others to see what they think. It is much like crowdsourcing your decisions. Ben further says, our behaviors are influenced by what we believe the majority is doing. If we see everyone dressing like Don Johnson or Madonna – we will adapt some of those fashion elements in our own style. Social proof can be one of the major behavior influencers. Simply put – it‘s what the cool kids are doing - and we want to be cool.
Apparently, attrition is contagious and the author calls it the “Snowball Effect.” There are generally two reasons to quit the present organization. One, an employee is dissatisfied with something in this organization. Second, he has found a better prospectus somewhere else. Either ways, people are curious about his exit and would like to follow him. Because what dissatisfies him as a human could dissatisfy you as well, and what appeals to him in other organization, may as well be appealing to you.
3.3 RED TAPISM:
An innovative employee would not like to be restricted by formal boundaries of working. He needs his own ways of doing things. An employee needs to be encouraged to get the work done in innovative ways. Organizations in the past have generally followed the traditional policies of work, doing the things as they have been done in the past. This policy doesn’t work with the Millennials who have their own ways of serving the best. As long as your core business policies are not hit, employees should be allowed to do it their way. If you don’t appreciate their competencies, someone else will.
I was working with one of the top Indian outsourcing companies for one of their American clients. As a policy measure we were supposed to be way too formal while we interact with customer, and surprisingly, everyone was. I had been interacting with Americans quite often at my previous job and I kind of knew how they interacted with people. I found my practical experience in total conflict with the policy of my new employer. To me, Americans were friendly people who would like fun while they speak. They wanted their work be done, whatever way you could. I adopted my own way of interacting with them, because I knew them. To my dismay then, my sessions with customers were being monitored and I was sent a notice to change the way I speak to them. I was told I am being too informal. A few months later my new employer was at odds, with much of its business taken away by a Philippines based outsourcing company. Our client preferred moving its business to Philippines because its customers were happier interacting with their agents, not us. A quality team was given the task of figuring out the reason. How are their agents better than ours?, how do they speak?. Very amazingly, they found their competitor doing what I was doing Being friendly with Americans and making them laugh, Being not so formal. Days after, the quality guys approached to me and said, dude, do as you have been doing and tell others how to do it.
3.4 NEPOTISM:
Everyone wants to work in a fair and transparent culture. They want to be dealt as equals under common policies. Biasness and preference is very common in South Asian culture, especially India. An employer needs to be unambiguous and unbiased about break times, work hours, Casual /Sick leaves and other related aspects. These are minute things that are being noticed and felt by everyone around. An employee is likely to desert an organization where people are preferred over him for not so genuine reasons.
4. WHAT SHOULD CONCERN YOU:
While there are many reasons why an employee might quit, rewarding good work with appropriate pay, benefits and recognition creates an environment that lets employees know they are valued (Kate Anania, 2016). Much has been written about the employee engagement and recognition over the last decade However, little has been seen in practice. Only one in three workers in the U.S. strongly agree that they received recognition or praise for doing good work (Annamarie et.al.(2016). Further as mentioned elsewhere in our study, only 13% of employees are actually engaged globally. This has to be the take along process and everyone needs to be engaged. While employers spend billions annually on off the job motivations like workout facilities, in-house medical centre, a library and other desirable amenities, they are still missing at the very core – and missing big time. Recognition and engagement are on the job motivators, something that primarily concerns an employee and they need to be dealt with upfront.
The rules of the game have to change; else your employees change the game. Praising an employee for something good he has done might help him overcome the inferiority complex (see Workplace Bullying: Shape up or Ship out, 2016) and consequently help in his transition from a bad chunk to the valued ones.
5. WHAT SHOULD NOT CONCERN YOU:
Every organization dislikes turnover and would try to understand and prevent it. So, for the most part, turnover needs to be tracked and analyzed. However, the fact is, not all turnover is bad. Sometimes, employees have a natural shelf-life and the turnover is expected and may be even good, or certainly acceptable (Ben Eubanks, 2011). The employers are changing their compensation structure; they don’t base it merely on length of service anymore. Consequently, a person who has been there for some time now and doesn’t perform is going to cause dissent and speak negative. The resignation of such people makes us rejoice and we may call it the “Good Turnover”. There is just another kind of turnover that shall not bother an employer much and I won’t hesitate calling it the “Neutral Turnover”. We call it neutral because you may witness the best of your team leaving you, which is problematic, but at the same time there is really nothing much you can do about controlling it. Chetan, one of the best supervisors on the floor working for the same outsourcing company that I used to work with, fell from the roof of a 3 storied building and went in to comma. Ravi, a distinguished quality guy, committed suicide because of personal problems. Aarti, a scoring agent on the floor, went for higher studies and Neelum, relocated after marriage. All of these cases add to your turnover percentage, but for the most part they were all beyond my employer’s control. A company is not much concerned about the good turnover; they are confronted with the bad one, which they want to take care of.
6. CONCLUSION:
6.1 KNOW YOUR EMPLOYEES:
The employers have to realize the world has changed much from Abraham Maslow’s time. People no more satisfy needs hierarchically one after another, they are better off having many needs met simultaneously. Yes I am speaking about the Millennials, the age group that is going to be the major portion of global workforce in decades to come. They have grown up in an era of remarkable connectedness (Amy and Brandon, 2016) and their way of doing stuff is way different from a typical 20th century employee.
A Millennial joining as a new entrant doesn’t just want his basic needs met, he would rather settle somewhere he finds affiliation and recognition right from the beginning. They are fame obsessed and come with energy and enthusiasm. All you have to do is to engage them. They believe in achievement and want to know where they stand. They compete with their past and would demand regular feedback. Millennials got so many participation trophies growing up that a recent study showed that 40% believe they should be promoted every two years, regardless of performance (see Joel Stein, 2013).
They are similar worldwide, thanks to, social media, globalization and the speed of change. It is not an option to know them, It is mandatory because they are going to be the people around.
6.2 KNOW THEM MORE:
People don’t always leave a job because they are not happy working there, they might instead have various job opportunities and might want to switch just for a change. This argument is consistent with the study reporting that more than 60 per cent of individuals in today’s workforce say they will change their career and re-invent themselves at least once during their working life (Kelly Services, 2010). The argument further draws support from a survey reporting that, no fewer than 54% of Indian workers are seriously considering leaving their jobs, and that figure spikes to 66% in the 16-24 year age bracket, even after not being desperately unhappy with their employer. 76% of Indians surveyed reported satisfaction with their jobs and 75% with their organizations (read Sylvia Vorhauser, 2012). The employers need to make their organizations highly social and dynamic. Employers need to stay ahead of the game by creating a work environment that fosters opportunity and encourages employees to want to stay long-term while at the same time realizing their desire for change (Kelly Services, 2011) Team outings, informal get-togethers and gaming like initiatives are positive steps towards giving new experiences to the employees, but there is dire need to do more to keep your place worth working for.
7. SUMMING UP:
The study has revealed some hot spots that need to be targeted preferentially. If an organization just tries to work on these reasons, it would certainly for the most part, have a very satisfied and productive workforce. There would however remain some contingencies that no researcher has spoken about and organizations would have to deal with them. The study has further given a hint about the importance of effective human resource systems in an organization. These systems can give competitive advantage to the employer, that being explained by number of well-developed theoretical frameworks like Becker et al.’s (1997) HRM-performance model, showing how the HRM systems designed to support and develop employee skills and motivation will result in increased productivity, creativity and discretionary effort leading to improved performance, profit, and growth. Another HRM-performance model proposed by Guest (1997),explains how the basic HRM processes like selection, training, appraisal, reward, job design and involvement practices can result in employee effort, cooperation, involvement. With better HRM systems in place, employers can witness improved individual performance that will result in increased organizational profit and above all, helps in retention. We have to accept the fact that 21st century employee is increasingly looking for job roles that include opportunities for growth and engagement. So to attract and retain people of such caliber, we have to provide them with that are a good fit between their expectations and the subsequent working environment. Know your people, show interest in them and help make your company the best one to work with.
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Received on 18.08.2017 Modified on 11.09.2017
Accepted on 06.10.2017 ©A&V Publications All right reserved
Asian Journal of Management. 2018; 9(1):149-154.
DOI: 10.5958/2321-5763.2018.00023.9