If you work for a single company for a long time, especially a large company, you’re probably familiar with the common workplace rituals that have developed which mark the beginning and the end of the employee life cycle. The welcome cards, the little speech when someone starts, the little mementos people buy for you when you start. Then there are the leaving parties, the speech on how great an asset someone has been and how sorry everyone is to see them leave, and the post-work trip to a local pub with a few of the people the person leaving became close to. Perhaps you’ve shed a few tears yourself or had others shed tears on your behalf after moving on from a company you grew attached to.
As negative as the actual experience of leaving a job can feel, losing people is an absolutely necessary part of the work ecosystem. People come and people go. It’s in the very nature of most forms of social human activity. Whether it’s a circle of friends, a royal lineage, a scientific project, a private company, or a public service, fresh blood is regularly introduced and others move to something new. It’s a vital part of how social structures adapt themselves to a changing world or try to influence the changes that occur around them. Without this exchange of people stagnation and weakness sets in.
“Change is not only constant; it is the only constant” – The HR Cat
Even if a company’s workforce isn’t growing a small degree of staff turnover is not only inevitable but beneficial for a whole host of reasons. New people can equate to fresh perspectives and new ideas that can enhance your business and prevent stagnation. Having people regularly join your company makes sure that your procedures for onboarding and recruitment don’t become rusty through being unused. It also helps staff morale to have regular newcomers. However, too much staff turnover can be detrimental to your company. Recruitment and onboarding costs time and money. If a large number of staff aren’t adequately familiar with the business at a given time productivity can be hit.
There is also the company reputation to consider. If you have contented and happy staff leave because they’ve progressed as far as they can with your organisation, or have simply decided they needed a change for whatever reason, this can be a good thing. Positive reviews on Glassdoor or simple word of mouth through LinkedIn or other sites can enhance the desirability of your company for other professionals. On the other hand a high turnover could be seen as indicative of a problem. If staff have left because they feel can’t develop, are being ignored, or due to personal conflicts, that can spell trouble. Negative reviews or word of mouth, or a lot of people with a very short period of work with you, will inevitably make recruiting the best people a whole lot harder as these things will give the impression that your company has a poor work environment.
But more than that, staff turnover is one of the best ways to observe the workforce. The type and level of staff turnover your company has is an absolutely superb indicator of the relative health of your workforce and whether or not the company culture is effective in fostering an environment where people are able to flourish. So how can we use turnover as a diagnostic tool to determine the health of the workforce, given that turnover is likely to occur whether your company has a happy workforce or not?The type and level of staff turnover your company has is an absolutely superb indicator of the relative health of your workforce and whether or not the company culture is effective in fostering an environment where people are able to flourish. Click To Tweet
“If a man’s wit be wandering, let him study the mathematics” Francis Bacon
The first step is a calculation of your turnover figures and a subsequent analysis of what’s happening. This offers a quantitative overview of whether this is a company-wide trend or whether there are specific areas which are problematic. A lot of this data will be very industry and area specific, so it’s important that you know the industry you’re working in well enough to identify whether trends are just the ebb and flow of business or an anomaly that warrants further investigation and action. It’s also important to know the local environment that your business exists in. For instance, if your business is a tech start-up and operates in a city which is full of other tech companies, you’ll find that staff turnover could be a problem inflicted on you by local labour market forces, in which case a strategy to out-compete the local companies for people will be required.
If the data points to a problem internally within your company then it needs to be addressed quickly. If it turns out to be a problem with company culture or or bad practices it is rather like an infection – the longer it festers, the more damage it will do and the harder it will be to treat. We have the quantitative data which can show whether there is a problem, now we need the qualitative data which can more specifically and accurately diagnose where and what the problem may be.
A deeper delve into the numbers will demonstrate whether this is a general problem throughout your organisation or whether it’s specifically focused in one or more areas. You should also check the historical data as well, if you have it, to determine how long it has been going on for. The HR metrics for individual departments can reveal much on its own. If most departments have stable employee numbers, but a particular department has a lot of turnover with the occasional employee regularly having to do two jobs at once because of a lack of ability to fill vacancies and/or key staff leaving, that’s telling you something fairly obvious – that department is likely being poorly managed and needs an intervention. Whilst problems in and of themselves don’t reveal poor management, problems which are exposed by HR sniffing around, which have existed for a while without the relevant manager realizing it, speaking out about it, coming up with a plan to solve it, or seeking help to address it, are indicative of poor leadership.
Whether the problem is with a department, a few departments, or an entire company, an even more detailed picture of the workforce will be needed if you have ascertained that there is indeed a problem. The very best method for determining what might be causing a problematic turnover of staff is exit interviews. Not all companies hold exit interviews, but they really should. The reasons behind someone moving on, even if they’re leaving on very good terms and were satisfied with their time in your organisation, can reveal a lot about the current condition of the workforce. A good quality exit interview will consist of two parts. The first of these will likely be an employee questionnaire, containing the usual batch of cookie-cutter questions such as “How do you rate your relationship with your manager?” or “What is your main reason for leaving?”, often with drop-down boxes to enable easier reporting. This is valuable information, as it will offer a method to directly compare data from different employees. It also allows the HR department to possibly link a direct cause to the staff turnover very easily, and provide proof of why to show to sceptical managers. It can also be used as a basis for implementing any changes you decide to make going forward.The very best method for determining what might be causing a problematic turnover of staff is exit interviews. Click To Tweet
“Not everything that can be counted counts, and not everything that counts can be counted” Albert Einstein
The second part will be something more rarely done and unfortunately undervalued by many companies – a human one to one with the person leaving and an opportunity to have an open and honest conversation. However, the quality of information you get from this part of an exit interview will hinge on how much the person being interviewed trusts the interviewer and whether or not there is a decent rapport between the interviewer and interviewee. Trust is absolutely paramount, as the interviewee might feel that, for example, if they’re honest about conflicts between them and their previous manager that this will have repercussions in terms of references or reputation, particularly if they work in a niche area. The quality of information gained here will also hinge on whether the person interviewing has the people skills and awareness to ask the right questions. Unlike a job interview, the information you’re after is all about the person and how they feel about things, and never about the impact they’re going to have on the company by leaving. So questions about their actual job performance are worthless at this point, but questions asking whether they felt valued or had their contribution recognized are vital.
Exit interviews are also an excellent opportunity to allow employees to air any grievances they’ve had and possibly mollify them if there is bad blood between them and the company or company staff. You might not be able to talk an ex-employee out of telling others about their negative experiences at your company, but you may just be able to persuade them not to leave an angry rant about you on Glassdoor. On the other hand, if people are mostly telling you that they’ve had a great time at your company but are moving on for unrelated reasons, this is information which shows your organisation’s workforce is in good health. This is not a reason to get complacent though, as a workplace culture which is neglected can quickly become unfit.
I’ve not discussed how to address problems in this particular blog entry, as each separate problem will have a separate solution which would likely be a blog in itself. But, if we can go back to the medical parlance for a second, if we apply the wrong sort of cure to the wrong sort of injury we can make matters much much worse. Diagnosis of employee data is a key part of HR. A proper and thorough analysis of staff turnover, whether it is a problem or not, is one of the best diagnostic tools available.
About the author:
I’m a HR professional, currently in Germany and formerly of Britain, and I’ve worked in many businesses across multiple sectors, though mostly in tech, manufacturing, construction, and engineering sectors, as well as dabbling in law. I’ve cut a swathe through a multitude of companies, leaving restructured, merged, and smoothly running and efficient departments in my wake. I’m also on a quest to put the “human” back into HR, and to build HR departments that are not just seen as a tool of the management but as a department which ensures that people have as positive a journey as possible throughout their working life. I work in Berlin, and live in Hohen Neuendorf with my family, cats, and an abundance of giant wasps.