Culture, HR Insights

How Retention is Like Gardening: At Times, You Need to Change the Soil

Photo by istockphoto.com

“What time did you get in last night,” I asked my daughter.

“Around 3 am,” she answered. It was now 5:45 am and I was leaving the house. As I walked downstairs from her room, I shook my head in wonderment. My question was this: how can you continue working people all these hours?

Everyone has a breaking point.

Overlong shifts will eventually impact retention

When my daughter interviewed for the job, she was told that yes, there would be late hours. She assumed that a few nights would be OK.

She later found out that the last couple of people in her position quit. One person walked out for lunch and never returned. How is that for exiting the premises?

What I was told was that this is an issue in only one department. Everyone else in the company works “normal” hours.

During my time, I have done numerous late nights, sometimes solo, but most of the time with my team. I knew as a manager that I had to compensate them in some way for that. My solution: don’t come in tomorrow, or better still, choose another day and take it off on me.

This is called quid pro quo. It worked and we lived happily ever after.

If you have a situation where these type of hours are the norm, expect your retention numbers to not remain very high.

Retention numbers can be misleading

There are times when we take a look at metrics and they can be misleading. They are misleading because, in the aggregate, they do not mean much. During my time in publishing, the industry average was around 12-14 percent. So, I felt that because we always stayed below that number we were good.

Average turnover figures for an organization are only moderately useful. They provide a general benchmark compared to other companies or organizations in the industry segment.

The real value of turnover data is from segmentation. Turnover must be drilled down into by:

  • Department;
  • Manager;
  • Location;
  • Level of talent;
  • Employee demographics.

Segmented turnover data by manager can identify those managers who seem to have a recurring problem in keeping good people. Appropriate coaching, and training in some cases, can be arranged to alleviate this situation.

Increasingly, managers should be held accountable for turnover, so these data points become necessary.

Turnover by talent level is a valuable organizational indicator. Hewitt (now Aon Hewitt) has identified the metric of “Talent Quotient” that compares the turnover of “A” level talent to the turnover in general for the rest of the organization. If the turnover rate for pivotal “A” level employees is higher than the rest of the organization, it is a indication of dysfunctional organizational practices that need to be corrected.

Not much different than gardening

I am gardening fanatic. There is nothing I enjoy more that getting up on Saturday morning in the spring and spending the better part of the day in the yard weeding and planting.

Each year when I bring in new plants, I know which soil has to be replaced. I keep it simple. If I am losing a plant each year in the same pot, there is no need to put the new plant into the same soil and expect it to thrive. As soon as I change the soil, I see growth. This same simplistic principle should be applied in organizations.

In marketing, some companies will segment their customer base with as little as three unique segments, while other companies require as many as 20  segments to satisfy their data-driven needs. The decision of how many customer segments a company should create is largely dictated by the particular make-up of their customer base, and the organization’s ability to develop and deliver unique segment-specific marketing treatments.

Thus in HR, we must drill down to get a better view.

A sinkhole of wasted money

Although this situation with my daughter working over-long hours will eventually work out one way or another, these type situations happen in your organizations each and every day. If we only track them as employees exit and become another statistic, we are missing a huge opportunity.

If you continue to churn employees, this represents a sinkhole of money going down the drain. The basic formula of 150 percent times the average salary to replace a lost employee pretty much tells the story. Tell me what CFO would not be interested in hearing of a plan to turn this money faucet off?

By drilling down, you can see the organizational impact — and that people decisions effect organizational results, or the lack thereof.

Remember you can’t use the same soil if you are not getting top results.

Ron Thomas is CEO of Great Place to Work-GCC countries, based in Dubai. He formerly was Chief HR Officer of the RGTS Group in Saudi Arabia. Ron is also a senior faculty member of the Human Capital Institute. He holds certifications from the Human Capital Institute as a Master Human Capital Strategist (MHCS) and Strategic Workforce Planner (SWP). Ron's prior roles included senior HR positions with Xerox HR services, IBM, and Martha Stewart Living. Board memberships include the Harvard Business Review Advisory Council, McKinsey Quarterly Executive Online Panel, and HCI's Expert Advisory Council on Talent Management Strategy. He received the Outstanding Leadership Award for Global HR Excellence at the World Human Resources Development Congress in Mumbai, and was named as one of the 50 Most Talented Global HR Leaders in Asia. Contact him at ronaldtthomas@gmail.com or on Twitter.
  • Patricia Tarr

    Great article!