It Takes Real Investment to Stop Turnover In Today's Market
What can HR leaders do to prevent voluntary turnover?
In December 2017, the United States saw more voluntary turnover in the labor market than it has since January 2001. According to a Reuters report, December saw a month-over-month jump of 98,000 people leaving their jobs, bringing the total to 3.25 million quitting workers. Faced with that level of worker mobility, employers large and small are beginning to worry about the causes of employee turnover, and its effects.
ADP Research Institute (ADP RI) recently released a report on the issue, Revelations from Workforce Turnover. A Closer Look Through Predictive Analytics, which directly addresses this question. Its findings show that with between 60 and 70 percent of turnover being voluntary, workers are beginning to pursue their own employment preferences more aggressively. Taking their insights from 41,000 companies and 12.5 million employees, ADP identified more than 40 different factors that can influence a worker's decision to stay or leave their current job.
Collectively, these factors make up a profile of a likely job-leaver that can help businesses predict, and prevent, excessive turnover within their organization.
The Causes of Employee Turnover go Far Beyond Pay
In the report, ADP RI says data consisting of millions of actual employee experiences that was once "overwhelming" is the "foundation for usable, factual information." This information has shown that while pay and promotion-related factors are the primary drivers of turnover, as we might expect, they are not nearly the only issues that motivate workers to leave their job.
ADP RI found "commute characteristics tend to be more important than experience and tenure," on average, and that overtime/premium time issues are among the most important outside of compensation. But the average is just a guide, and not particularly useful to any one business.
Communication is the key to employee retention, reports HR Technologist. Hearing your employees, and making them feel heard, is how you'll come to understand their needs. Open lines of communication are also the only way you can show your workforce the investments you are making, and that their input is having an effect.
Find the Employees Most Likely to Quit...
ADP RI's predictive model for turnover shows the best way to approach a problematically high turnover rate: understand it.
Start by thinking about your company from the perspective of your most valued employees; for them, what does it offer? Workers whose skills are in high demand may view salary and traditional benefits packages as expected. For such workers, it's the creative perks that are beginning to endear employees to a workplace, especially workers from the crucial millennial demographic. This is the basic insight Google and other Silicon Valley companies have tried to use to retain coders who are notoriously in demand. Whether it's a door-to-door shuttle or a complementary lunch, the direct monetary value of a service can be outweighed by the convenience or sheer novelty of it.
...and Invest in What They Care About Most
It takes real investment to affect a worker's desire to quit their job, but firms that manage to limit turnover will see a direct ROI. ADP RI's analysis shows that, fancy benefits packages aside, direct pay and benefits are still the most powerful reason workers leave their job, especially in the finance industry. This shows the real issue, even when workers are demanding less traditional forms of compensation. Whatever form the spending takes, businesses need to spend now so they can save later on the costs of turnover.
Spending that keeps turnover low will help limit the number of team members who leave in the middle of a project, and offer direct savings in the form of lowered recruitment and onboarding costs. Firms that lower turnover should also see an improvement in productivity, a reduction in time to market and better retention of institutional knowledge.
Nothing comes for free, especially in business, but it's possible to keep costs under control with the right tools. When a business finds its employee retention is below the industry standard, it can now turn to tools like ADP RI's predictive models and start determinging why, and take action accordingly. No one business can influence the overall level of turnover in the market, but it can always take action to position itself well within the market.