how to manage employee turnover

HOW TO MANAGEEMPLOYEE TURNOVER

Rusty LindquistV P S T R A T E G I C H R I N S I G H T S

B A M B O O H R

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Mykkah HernerM O D E R N C O M P E V A N G E L I S T

P A Y S C A L E

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"HR today sits smack-dab in the middle of the most compelling competitive battleground in business, where companies deploy and fight over that most valuable of resources—workforce talent."

-Matthew D. BreitfelderHBR: “Why did we ever go into HR”

A Changed Perspective

Millennials will comprise 75% of the global workforce by 2025. - Deloitte

Millennials

91% of Millennials expect to stay with your company fewer than three years. – Future Workplace

v75%

v91%

Average tenure for Millennials is 2 years (5 years for Gen X and Gen Y)– Payscale

v2yrs

43%

1yr

90-200%

Within the next 10 years, 43% of the US workforce will be eligible for retirement- Forbes

Baby Boomers

Among the jobs that 39-44 year olds began, one third ended in less than a year– Forbes

Cost of replacing an employee is between 90-200% of their annual salary.– SHRM

83%

23m

52%

83% Of executives say they’re increasing contingent workers.- Oxford Economics

Contingent Workers

There’s projected to be 23 million contingent workers by 2017 (up 26% in 2 years)– MBO Partners

52% of Millennials expect to work independently (82% in emerging markets).– Deloitte

• Workforce competency and skills gap

• Increased competition

• Globalization

• Culture

• Competition for talent

• Stresses on work-life balance

• Etc.

Additional Dynamics

–Bersin by Deloitte

–Ram Charan Best-selling Author, World-renowned Business Advisor

Organizational Power

Organizational power goes to the group that deals with the biggest problems

Alfred Marshalleconomist

Defining and Quantifying Turnover

The rate at which people leave a place, company, etc., and are replaced by others

Adding Good Complexity

Good Turnover vs. Bad Turnover

Low performer High Performer

Voluntary X% Y%

Involuntary P% Q%

Retention is still a Major Concern

Turnover costs more than just dollars

• Morale• Engagement• Performance• Training• Knowledge retention• Nimble to market changes• Cost to replace

Common Myths of Employee Turnover

Myth: Turnover is Always bad

Myth: Turnover is Bad for Morale

Myth: We can predict turnover based on generation

Myth: Turnover is always time-consuming and costly

Employee Retention

BusinessValue

H

L

Strategic

Operational

Micro Small Mid Large

HR viewed as a cost centerTransactional HR High-Impact HR

HR as a strategic investment

Evolution of HR

BusinessValue

H

L

Strategic

Operational

Micro Small Mid Large

Evolution of HR

HR viewed as a cost centerTransactional HR High-Impact HR

HR as a strategic investment

Basic Operations

Strategic Operations

HR HIERARCHYOF NEEDS

(Culture, Performance, Engagement, Satisfaction, Employment Brand, AdvisingTalent Management, SuccessionPlanning, Learning & Development…)

GeneralOperations

Business Value

(Operational Efficiency: HRIS, Records, Talent Acquisition, Compliance Tracking, Etc.)

(Payroll, Benefits, Time &Attendance, etc.)

©

Understand your true worthas a strategic necessity

Eliminate the unnecessaryshed all the dead weight

Organize your informationto lay a foundation for insight

Automate the operationalset yourself free to do great work

Maximize business valuealign activities to strategic outcomes

Solve meaningful problemslearn to think, act, and win like a business.

Measure and reportthe value and impact of your work

ESCAPE ELEVATE

Aon Hewitt

Engagement goes beyond satisfaction. Engagement occurs when we find meaning, autonomy, growth, impact, and connection--MAGIC--in what we do.

• Purpose Alignment• Culture Alignment• Personal / Professional Development

• Learning and growing• Clear career path

• Loyalty• Leadership• Team / Peers• Customers• Work

• Investment / Ownership (skin in the game)• Effort• Time• Equity

• Feel Valued• Compensation• Reward & Recognition

• Sense of winning• Keeping Score• Common Enemy

• Sense of Belonging• Tribes• Friends / Personal Connections• Sense of pride• Community

Common Engagement Elements

Setting up your comp plan for success

Comp as a Keystone

Components of Comp

http://businessmodelalchemist.com/blog/2011/11/make-your-business-model-clear-with-vivid-thinking-guest-post-by-dan-roam.html

Solid Base Pay Plan

Clear Strategy

Incentive Plan

Competitive Market Pay

What compensationmix is right for your org?

Compensation Strategy

Talent Market(s)

Industry, Size, Location

Level of competitiveness

How aggressively to

pay

What to reward

Performance, Experience, etc

What about variable pay?

Less than 100 Em-

ployees

100 - 1,000 Employees

More than 1,000 Em-

ployeesRetention bonuses

Hiring bonuses

Individual incentive bonuses

Team incentive bonuses

Spot bonuses or other discre-tionary bonus programs

Most give bonuses: 81% of top performing companies74% of all companies

Recruitment & Retention Plans

54.6%

18.3%

35.3%

13.3%

58.2%

28.1%

59.7%

21.3%

38.8%

14.0%

63.4%

32.2%

Plans to recruit and retain high-performing employeesAll Top Performer

Immediate ActionsCalculate turnover rate

Identify good and bad turnover

Brainstorm retention efforts that work

Evaluate your comp plan – does it align with org objectives for retention?

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PayScale

Rusty LindquistV P S T R A T E G I C H R I N S I G H T S

B A M B O O H R

@ r u s t y l i n d q u i s t

r u s t y @ b a m b o o h r . c o m

w w w. l i n k e d i n . c o m / i n / r u s t y l i n d q u i s t

Mykkah HernerM O D E R N C O M P E V A N G E L I S T

P A Y S C A L E

@ m y k k a h _ h e r n e r

M y k k a h H @ p a y s c a l e . c o m

w w w. l i n k e d i n . c o m / i n / m y k k a h h e r n e r