Retention Is One of HR’s Dumbest Metrics

The Great Resignation. Are you tired of hearing that phrase yet?

You probably are. Which is why there’s The Great Reshuffle, The Great Realization, The Great…enough. Enough! Yet still, there’s no shortage of consultants and marketers who think they’re brilliant when they concoct these games of semantics.

One thing all these “Greats” have in common, however, is a focus on retention: That is, you’ve got to stop the stampede of people leaving your company because the less turnover, the better.

Really? Don’t you want some people to leave? Let’s not pretend that you have the resources or desire to coach your poor performers. Let’s not pretend that they all want to be coached by you. And let’s not pretend that enough managers have backbones to fire people.

So when some people leave, it’s not a cause for concern. It’s a moment to breathe some relief. You know, depending on who’s leaving.

Overall Retention Is Dumb

Overall retention is a lame number that indicates nothing worth indicating. So in addition to asking how to keep people, it’s also worth pondering whether your company should accept, even encourage, turnover?

As I wrote years ago in an article for The Conference Board Review titled “Let Your People Go,” “[J]ust as treating a disease can inflict greater harm than the illness itself, so too regarding retention strategies. Your efforts may tether people to your firm, but low turnover may cloak various corporate cancers. Worse, it may exacerbate them.”

It’s therefore important to take more nuanced perspectives on retention.

Exit interviews may indicate why people leave (as if! people lie in them all the time), but they say nothing about why others stay.

Hence, stay interviews. But these, too, are just other opportunities for people to lie or at least not always be completely candid.

The nature of work rests on spoken and unspoken power imbalances. That any company would expect its workers to reveal in conversations their true frustrations or why they stay is nothing more than a useless corporate exercise. Maybe not always. But almost always. (I’d love to insert a stat here, but stats based on lies are just more lies.)

You think Chuck in accounting is going to tell you that he loves working for your company because he gets to slack off for half the day and watch The Price Is Right? Exactly. And trust me, if your company is large enough, there are plenty of Chucks throughout your workforce.

The catch-22 is that Chuck stays for the same reasons that others stay — flexibility.

That F word has been all the rage over the past two years as we’ve transitioned remote and hybrid work. And don’t get me wrong. Flexibility is important — but not because it drives retention. Rather, because it helps drive performance and engagement. Aren’t those what really matter? Aren’t those metrics more important than attrition?

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Now, before I go on, I know that turnover has major costs, but here’s a dirty open secret. No company really knows what those costs are. “Plus, turnover calculations rarely account for costs of continuing to employ a craptastic vampire who sucks spirit and productivity from those around him,” I’d written. “We’ve all worked with, if not for, one of these irritating bats. Once one flies out the window, morale and other benefits usually flood back in.”

Ask your CFO about that line item on your P&L sheet.

The Weird Connection Between Turnover and Engagement

I went on to vent in that article: “Low turnover for the sake of low turnover is nonsensical at best and damaging at worst — because focusing on turnover isn’t just aiming at the wrong problem. It’s not targeting a problem at all. Issues with turnover are really issues with engagement.”

The “problem” with activities that engage people is that many of them typically engage all types of performers — because who doesn’t appreciate recognition from their boss or training. (OK, fine, Chuck might pass on your L&D efforts, but let’s finally just leave him alone to watch Plinko.)

This isn’t to say that companies should not do their best to engage their people. It is, however, to say that engagement is no elixir to fix all your problems. Which begs the question: Is engagement even relevant to turnover?

“The answer hinges on which group of employees — engaged or disengaged — is likelier to vacate,” I wrote. “On one hand, there’s the argument that engaged workers are more apt to stay because, well, they’re engaged. Those detached from their jobs, then, are more prone to seek fulfillment elsewhere. On the other hand, engaged staffers are psyched about their jobs and their careers. They continually network, speak to recruiters, and check job boards, while their slacker co-workers are checking Facebook.”

Again, this speaks to the uselessness and absurdity of calculating overall turnover. It’s ultimately not that but which people leave that truly matters.

It’s critical to look at regrettable turnover. Look at turnover by performance status. Are high performers exiting at a greater rate than low performers? Then, too, how replaceable are those who are leaving? Not all roles or individuals are equally valuable to your company.

Ultimately, you’ve got to segment your workforce to make turnover and retention numbers count. Otherwise, persistent talk about retention and turnover will continue to be nothing more than mindless corporate nonsense.

Vadim Liberman is editor TLNT and ERE.net (the devil wears TJ Maxx) — a workplace renegade advancing how we think, work, and live. He has previously worked as a strategy consultant to HR and recruiting tech companies at The Starr Conspiracy, as a talent management professional at Prudential, and as senior editor of The Conference Board Review, a magazine for business leaders. Vadim loves to talk about all things HR, talent acquisition, and Bravo TV shows. Bring it!

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