What Is the Best Way to Benchmark First-Year Turnover?
Dear Turnover Tension:
Your best approach would be to assume that turnover is not healthy and keep adjusting your goals to make it better. Not the answer you were expecting?
In his book “Good to Great: Why Some Companies Make the Leap … and Others Don’t,” author Jim Collins notes how good organizations look over their shoulder at competitors’ metrics for comparison. Great organizations, on the other hand, compare themselves only to themselves.
You lose most new employees either because you hire them wrongly or manage them poorly. It requires taking responsibility to improve your organization’s performance. Some would argue that a certain amount of turnover is good. But what’s wrong with keeping everyone you desire to keep—if you truly do want to keep them?
Some comparison metrics provide false hope. Should you be pleased if your turnover is 25 percent while that of your competitor is 30 percent? Or if you conduct an engagement survey and 63 percent of your team is engaged versus a comparison metric of 61 percent? Flip it around: Should you feel content if 25 percent of your workforce is looking to jump ship or if 37 percent are disengaged?
A far better metric is to place a dollar value on turnover and drive your losses down by reducing all forms of turnover. Your top team will be motivated to help you improve turnover once they see the dollars lost—rather than taking comfort by comparing your company’s performance to others.
That’s the best way to avoid targeting your company settling for being only better than average, and move up to the class of excellence.
SOURCE: Dick Finnegan, Retention Institute, Longwood, Florida
LEARN MORE: Workforce.com has a free whitepaper “Leading the Way in Employee Engagement & Retention,” available for download here.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.