How to Manage Employee Turnover
Transcript of How to Manage Employee Turnover
HOW TO MANAGEEMPLOYEE TURNOVER
Rusty LindquistV P S T R A T E G I C H R I N S I G H T S
B A M B O O H R
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Mykkah HernerM O D E R N C O M P E V A N G E L I S T
P A Y S C A L E
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"HR today sits smack-dab in the middle of the most compelling competitive battleground in business, where companies deploy and fight over that most valuable of resources—workforce talent."
-Matthew D. BreitfelderHBR: “Why did we ever go into HR”
A Changed Perspective
Millennials will comprise 75% of the global workforce by 2025. - Deloitte
Millennials
91% of Millennials expect to stay with your company fewer than three years. – Future Workplace
v75%
v91%
Average tenure for Millennials is 2 years (5 years for Gen X and Gen Y)– Payscale
v2yrs
43%
1yr
90-200%
Within the next 10 years, 43% of the US workforce will be eligible for retirement- Forbes
Baby Boomers
Among the jobs that 39-44 year olds began, one third ended in less than a year– Forbes
Cost of replacing an employee is between 90-200% of their annual salary.– SHRM
83%
23m
52%
83% Of executives say they’re increasing contingent workers.- Oxford Economics
Contingent Workers
There’s projected to be 23 million contingent workers by 2017 (up 26% in 2 years)– MBO Partners
52% of Millennials expect to work independently (82% in emerging markets).– Deloitte
• Workforce competency and skills gap
• Increased competition
• Globalization
• Culture
• Competition for talent
• Stresses on work-life balance
• Etc.
Additional Dynamics
–Bersin by Deloitte
–Ram Charan Best-selling Author, World-renowned Business Advisor
Organizational Power
Organizational power goes to the group that deals with the biggest problems
Alfred Marshalleconomist
Defining and Quantifying Turnover
The rate at which people leave a place, company, etc., and are replaced by others
Adding Good Complexity
Good Turnover vs. Bad Turnover
Low performer High Performer
Voluntary X% Y%
Involuntary P% Q%
Retention is still a Major Concern
Turnover costs more than just dollars
• Morale• Engagement• Performance• Training• Knowledge retention• Nimble to market changes• Cost to replace
Common Myths of Employee Turnover
Myth: Turnover is Always bad
Myth: Turnover is Bad for Morale
Myth: We can predict turnover based on generation
Myth: Turnover is always time-consuming and costly
Employee Retention
BusinessValue
H
L
Strategic
Operational
Micro Small Mid Large
HR viewed as a cost centerTransactional HR High-Impact HR
HR as a strategic investment
Evolution of HR
BusinessValue
H
L
Strategic
Operational
Micro Small Mid Large
Evolution of HR
HR viewed as a cost centerTransactional HR High-Impact HR
HR as a strategic investment
Basic Operations
Strategic Operations
HR HIERARCHYOF NEEDS
(Culture, Performance, Engagement, Satisfaction, Employment Brand, AdvisingTalent Management, SuccessionPlanning, Learning & Development…)
GeneralOperations
Business Value
(Operational Efficiency: HRIS, Records, Talent Acquisition, Compliance Tracking, Etc.)
(Payroll, Benefits, Time &Attendance, etc.)
©
Understand your true worthas a strategic necessity
Eliminate the unnecessaryshed all the dead weight
Organize your informationto lay a foundation for insight
Automate the operationalset yourself free to do great work
Maximize business valuealign activities to strategic outcomes
Solve meaningful problemslearn to think, act, and win like a business.
Measure and reportthe value and impact of your work
ESCAPE ELEVATE
Aon Hewitt
Engagement goes beyond satisfaction. Engagement occurs when we find meaning, autonomy, growth, impact, and connection--MAGIC--in what we do.
• Purpose Alignment• Culture Alignment• Personal / Professional Development
• Learning and growing• Clear career path
• Loyalty• Leadership• Team / Peers• Customers• Work
• Investment / Ownership (skin in the game)• Effort• Time• Equity
• Feel Valued• Compensation• Reward & Recognition
• Sense of winning• Keeping Score• Common Enemy
• Sense of Belonging• Tribes• Friends / Personal Connections• Sense of pride• Community
Common Engagement Elements
Setting up your comp plan for success
Comp as a Keystone
Components of Comp
http://businessmodelalchemist.com/blog/2011/11/make-your-business-model-clear-with-vivid-thinking-guest-post-by-dan-roam.html
Solid Base Pay Plan
Clear Strategy
Incentive Plan
Competitive Market Pay
What compensationmix is right for your org?
Compensation Strategy
Talent Market(s)
Industry, Size, Location
Level of competitiveness
How aggressively to
pay
What to reward
Performance, Experience, etc
What about variable pay?
Less than 100 Em-
ployees
100 - 1,000 Employees
More than 1,000 Em-
ployeesRetention bonuses
Hiring bonuses
Individual incentive bonuses
Team incentive bonuses
Spot bonuses or other discre-tionary bonus programs
Most give bonuses: 81% of top performing companies74% of all companies
Recruitment & Retention Plans
54.6%
18.3%
35.3%
13.3%
58.2%
28.1%
59.7%
21.3%
38.8%
14.0%
63.4%
32.2%
Plans to recruit and retain high-performing employeesAll Top Performer
Immediate ActionsCalculate turnover rate
Identify good and bad turnover
Brainstorm retention efforts that work
Evaluate your comp plan – does it align with org objectives for retention?
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PayScale
Rusty LindquistV P S T R A T E G I C H R I N S I G H T S
B A M B O O H R
@ r u s t y l i n d q u i s t
r u s t y @ b a m b o o h r . c o m
w w w. l i n k e d i n . c o m / i n / r u s t y l i n d q u i s t
Mykkah HernerM O D E R N C O M P E V A N G E L I S T
P A Y S C A L E
@ m y k k a h _ h e r n e r
M y k k a h H @ p a y s c a l e . c o m
w w w. l i n k e d i n . c o m / i n / m y k k a h h e r n e r