Your People Are Your Biggest Asset!

Who Is Responsible for Retention and Turnover?  

The custodians of employee retention and turnover data are human resources professionals and, sometimes, recruiting teams. They are charged with monitoring the metrics that gauge the overall employee experience and ensuring that the business has enough people to meet its immediate objectives and growth plans.

While the responsibility for ensuring good retention and turnover rates belongs to the entire organization—from senior leadership to HR and rank-and-file colleagues—the individual with the greatest singular impact on employee retention is the employee’s manager.

Poor managers are consistently named across retention and turnover studies as a top reason that employees leave—and good ones are a key reason people stay. In the Gallup study, some 52% of employees who voluntarily left a company said their managers could have taken steps to prevent them from leaving. More than half say that, in the three months before they left, no one—a manager or any other leader in the organization—spoke with them about their job satisfaction or future career plans.

The manager is often the main touch point for solving, or at least discussing, many of the issues that cause voluntary turnover, including compensation, lack of a career path and a need for better work-life balance. Unfortunately, analyst firm the Work Institute’s 2020 Retention Report indicates that manager behavior and communication had worsened year-over-year. This is an area HR teams need to address because even modest improvements in supervisor ratings can significantly decrease the likelihood of an employee leaving.

Measuring Employee Retention & Turnover Matters  

If a business doesn’t have the right people with the right skills, it can’t deliver its products and services. And if it can’t attract more people with new and specialized skills, it can’t innovate or execute on growth plans.

Employee turnover and retention rates provide strong indicators about how well the business is taking care of its people. This includes whether it is paying competitive salaries, providing training and opportunities for advancement and offering a good work/life balance for employees, as well as how effective management is. High turnover and low retention rates signal problems with aspects of the organization’s culture and employee experience.

Turnover and retention are closely linked to employee engagement. Companies with higher levels of employee engagement have lower turnover rates — as much as 43% lower for companies that have less than 40% annualized turnover. according to a study of more than 112,000 business units by analytics firm Gallup. And employee engagement is linked to organizational outcomes, with a very important effect being that companies with lower turnover are more profitable and have more loyal clients. When comparing top quartile and bottom quartile engagement business units and teams, Gallup found a differential of 23% in profitability and 10% in client loyalty.

Why Do Employees Leave Jobs?  

The reasons employees leave are remarkably consistent across studies: poor career development opportunities, poor work-life balance, a bad manager and inadequate compensation and benefits.