Compared to my mom and dad, who stayed with one employer for more than 20 years, I am practically a mercenary when it comes to jobs,” says George Thompson, a 38-year-old corporate attorney who works in the legal department of Sony Corp. of America in New York City. Employed with Sony for more than five years, Thompson knows he’s a valued employee, based on feedback and reviews: “My supervisor trusts me. I think well on my feet. I fully understand the issues surrounding business and I have the ability to offer creative solutions to the complex problems that often come up when negotiating large deals.”
So what should a manager recognize in an employee like Thompson to keep him engaged at work? “I’m looking for challenges. I don’t mean that every day should be a new challenge, but they should come along fairly frequently. When you are doing the same thing over and over again, you have a tendency to become restless. I want to be utilized to my fullest potential. And I certainly don’t want to feel like just a cog in a machine,” Thompson explains.
He’s not alone. Sharp, innovative professionals today place greater emphasis on the quality of their job experiences rather than longevity in a position. “The highest turnover rate is always with the youngest and newest people in the workforce,” says Gregory P. Smith, author of Here Today, Here Tomorrow: Transforming Your Workforce from High-Turnover to High-Retention (Dearborn Trade; $24.95). “They don’t have loyalty to a company; they have loyalty to themselves. And if they don’t feel the company is taking care of them, they’re going to leave.”
Research shows that approximately 22% of American workers voluntarily leave their jobs within the first year. But the search for new, quality employees has financial implications for the company. Turnover and replacement costs vary, but depending on salary level and job responsibilities, a private company loses, on average, more than $13,000 when a full-time employee leaves — up 6.8% from 2002, according to a recent Employment Policy Foundation study.
Smith calculates that replacing a worker who makes $48,000 a year could cost a company up to $40,000 in lost productivity, having to place recruitment ads, interview new candidates, train new employees, and pay overtime to other employees who now have to pick up the slack. The cost can be even greater if relocation fees are involved. (Learn how to calculate turnover costs at www.keep
ingthepeople.com.) “Most companies don’t even measure this. They just accept that people quit and need to be replaced,” says Smith. “But if you’re a good businessperson, you want to create an environment where people don’t leave. It’s cheaper to retain your people than to constantly replace them.”
Experts agree that there is often incongruence between what many managers believe and the reality of why employees leave. More than half of all exiting employees cite better pay and benefits as their reasons for moving on, however, “many times they’ve decided to leave because they don’t like the people, the boss, or the environment they are in,” says Smith. In reality, only 12% actually depart because of money matters.
“I have spent years as a career counselor, working with people who left their jobs. I’d listen to people talk about what they wanted at their next job and money was hardly ever at the top of the list,” says Leigh Branham, a consultant who specializes in employee retention strategies and author of The 7 Hidden Reasons Employees Leave (AMACOM; $24.95). Branham suggests that “an overwhelming three-fourths of the workforce is disengaged,” meaning they are losing interest in their jobs and are in some phase of the departure process.
Here are some of the reasons employees leave:
The job does not meet an employee’s expectations. Retention begins during the interview process, says Smith. Job responsibilities and benefits should be clearly outlined and defined. Miscommunication at this stage sets a bad precedent for the professionalism and integrity of the organization.
The employee
and the job are mismatched. This usually happens when management is in a hurry to fill a position. It’s better to take your time and be thorough, even if it takes longer. “Think about it as ‘hire fast, suffer slow,'” says Branham.There’s a lack of effective feedback. According to Branham, employees experience some sort of disengagement before they decide to leave: “A manager can step in and disrupt or reverse this process by simply sitting down with the employee and asking, ‘How are you doing?'”
There’s a lack of development and advancement opportunities. “Managers and executives need to think of their company as a professional sports team and look at each individual as talent,” says Smith. In a survey where employees rated managers on 67 necessary leadership competencies, developing direct reports ranked last. “The employee’s experience must be managed from their first day on the job to the last,” says Smith. You can’t just hire them and forget about them.