By Kathleen Laney - October 21, 2015
For those of us in the parking industry, we are all familiar with the concept that free parking is in fact quite costly. Parking industry expert, Donald Shoup discusses in his book, the High Cost of Free Parking, how free parking leads to many negative consequences including overuse, shortage and conflicts over parking.
In much the same sense, there is a very high cost to employers who have poor talent management practices that result in high employee turnover and a substandard talent pool. Both turnover and poor quality talent end up being much more costly to employers than investing in their most important asset - talent – in the first place. Employers who adopt competitive compensation packages, innovative employee recognition programs and employee development initiatives can more effectively foster a positive work culture that is essential today to attract and retain “game changing” talent.
Losing top talent can have serious consequences, affecting a company's morale, creating a skill deficit and placing a burden on the remaining employees to take on the workload of the former employee. Turnover also becomes a burden because employers must dedicate resources to finding replacement talent to ensure productivity and service quality levels remain high. And as the economy becomes more robust, workers will have less incentive to stay in a position where they feel overworked, underpaid and unchallenged.
What is the TRUE cost of losing an employee?
What are the most common reasons employees leave?
1. Management- People leave managers, not companies. About half of all workers have left a job because of their boss at some point in their career. It is the mangers who can make or break a workplace experience. Good managers help attract top candidates, motivate their employees and play a key role in keeping employees engaged. Poor managers deflate their workers and cost employers a ton of money in turnover costs and lost opportunities.
This reality is more important now than ever to understand and address as our workplace continues to diversify in every aspect, including age. We now have five generations of workers working side by side who all have different mindsets and expectations regarding work and employment. As this trend continues, there is a growing disconnect among employees from various generations regarding appropriate ways to treat and manage employees. Baby boomers tend to stick to what they know and manage as they were managed earlier in their careers. And too often this mindset is this is the way things have always been done or younger professionals should expect to jump through the same hoops they did earlier in their careers.
Micro management, lack of support and inflexible work policies drive away your high potential talent and top producers.
How to fix this?
2. OVERWORK OR LACK OF WORK/LIFE BALANCE
Employees dislike when work regularly bleeds into personal time. Workers who feel there is no balance between work and home and miss out on important moments in their family’s life will be more likely to quit regardless of financial compensation. In fact 89 percent of millennials state that work/life balance is the single most important contributing factor to job satisfaction and happiness in the workplace.
Overworking employees is also counterproductive. Stanford released research findings that show employee productivity per hour declines significantly when the workweek exceeds 50 hours. In fact, productivity is influenced negatively by overwork so much that employees who put in 70 hours of work per week produce nothing more than those who work 15 extra hours. It is unsustainable to work excessively long hours consistently.
How to fix this?
3. Lack of recognition AND opportunities
Providing employees with regular recognition and constructive feedback has many benefits. Publicly recognizing the efforts and achievements of your team, encourages future contributions and extra effort while building their confidence. Recognition does not always have to be formal; praise employees in day-to-day communications with your team.
Employees can also be turned off by a lack of upward mobility, especially if there is no apparent motivation for hard work. Talented employees want to know where they’re headed — or, at the very least, where they can go within the company and what it’ll take to get there. A lack of career path, not salary, is the top reason employees leave their jobs, according to Randstad’s 2015 Employer Branding Survey.
How to fix this?
The takeaway: If you don't want your best people walking out the door, you'll need to build a proactive retention strategy that meets their individual needs for career development, recognition, and work-life balance.