PrincePerelson & Associates

Reducing Employee Turnover

A study published by the Bureau of Labor Statistics in 2015, concluded that the average American will have 12 different jobs between the age of 18 and 50. 12 different jobs in a short 32-year span means the average person changes jobs about every three years with some individuals moving around even more often. Three years is just long enough to integrate oneself into an organization and master new job skills. Why leave at the point where you are finally comfortable in your position?

The Reasons Behind High Turnover

In 2017, Glassdoor Data Scientist, Morgan Smart and Andrew Chamberlain Ph.D. Director of Research at Glassdoor Economic Research analyzed the vast amounts of data collected on job candidates using the Glassdoor platform. They specifically focused on the job transitions made by over 5,000 workers between 2007 to 2016. Did these individuals make a change within the same company or move to a different one? Did they move from a company that ranks poorly in the areas of compensation and company culture to a higher ranking one?

Smart and Chamberlain sought to find a correlation between high turnover rates and factors within company control. They wanted to determine what, if anything, employers could do to slash the rate of turnover and reduce the amount of company funds devoted to recruiting and hiring replacements. Their findings were clear yet unremarkable. While there are many reasons for employee turnover, two factors stood out above the others.

Lack of Progression

Employees who stay in the same job with the same responsibilities and the same title for an extended period of time are more likely than their peers to leave their current employer for another company. This statement is especially true for younger employees. New to the workforce, these individuals are looking for ways to advance their career. They don’t want to feel like a newbie for the next 20 years. They want to climb the ladder, take on more responsibility, and increase their pay.

If employees cannot see a career path and opportunities for advancement within the organization, they will be forced to explore their prospects elsewhere. Providing a clear track forward for employees at all levels of the organization to advance both in skills and pay allows them to define their own future with the company. Experience shows that workers relish the chance to achieve new titles that signify increased seniority, responsibility, and value to their employer.

The United Parcel Service (UPS) significantly increased their employee retention by making employee advancement one of the core tenants of their operations. Today, most of its Vice-Presidents and three-quarters of their managers began their careers loading or driving delivery vehicles. Having worked their way up from the bottom, these leaders know the organization from top to bottom. They are financial and intellectual assets to the company.

Poor Compensation

In a fairness study conducted with Capuchin monkeys, researchers gave the monkeys food in exchange for completing a task. Both monkeys were happy to receive cucumber as a reward until researchers began giving one monkey grapes instead. Because the monkeys prefer grapes to cucumber, the cucumber was no longer acceptable, and the monkey refused it.

The desire to be treated fairly is one of our most basic needs. As employees rise through the ranks, taking on more responsibility and tasks, they expect that their compensation will increase as well. Performing more important and weighty work should come with rewards that signify their worth to the organization as a whole. Whether on a small or grand scale, promotions are little more than title changes if they are not accompanied by monetary compensation or added perks.

Wise employees build relationships within their field through networking in areas such as conferences, webinars, and on social media. Online platforms make it easy to obtain information about market trends in salaries and other forms of compensation. Employees who see others performing the same task and receiving a better reward, are likely to go where they can enjoy the same benefits as their peers.

Addressing Attrition

In his book titled Exit, Voice, and Loyalty published in 1970, Albert Hirschman introduced the theory that dissatisfied employees have two options for rectifying their situation. They can voice their concerns and attempt to resolve them or exit the situation, leaving their current employer and finding another job. This straightforward view of the employee’s predicament creates an opportunity for employers to insert themselves into the equation to provide a solution.

Many organizations perform exit interviews with employees. Unhindered by ties to the corporation, these individuals can often provide unbiased insight into existing problems leading to attrition. However, this type of interview does not need to be postponed until employees are on their way out the door. Regularly scheduled meetings with employees (one on one) to address concerns over compensation and career advancement gives them a voice for their concerns. A clear understanding of employee concerns allows employers to address them before the employee decides to leave.

Effects on Recruiting

As a business-owner, one comes to expect employee turnover. Understanding why employees leave, however, can help not only prevent high rates of turnover, but can allow you to leverage that information to recruit candidates to fill open positions in the future.

The key is to identify talented individuals stuck in a job without prospects for advancement. These people are likely looking to make a change, and you can offer them that chance to move forward. Staffing agencies know that when outstanding jobs become available, it attracts the attention of the most ambitious among us. Those that are thinkers and innovators, who have aspirations to become the leaders of tomorrow. They can help you structure your job offerings to be competitive and attractive to those looking not only for a job, but looking to build a successful career.

Looking to hire long-term employees for your call center? Contact us at PrincePerelson. Our new location in Utah County can help you structure your company to make it an attractive place to build a career. Founded in 1992, we have helped hundreds of companies across the Wasatch from recruit and onboard employees that fit their company culture and are looking for a place to put down roots for the long run.


Reducing Employee Turnover