A Smarter Way to Measure Turnover
Dear Not Sure:
This is a common question because there are few standards for “when to worry.” The result is that we seek benchmarks for turnover – or for engagement – and as a result are pleased with beating the benchmark. And since benchmarks are averages, we feel good about being one hair better than mediocre. These are two examples of when benchmarks are bad rather than good.
I suggest instead you (1) convert turnover to dollars and then (2) aim for continuous improvement. If you tell your CEO you are better than the benchmark, she will say, “Good. We are doing well.” But if you say turnover is costing $2.3 million, she will tell you to find ways to make it lower and never ask about a benchmark. CEOs speak the language of dollars and only when they can’t convert data to dollars do they reluctantly look at benchmarks.
You will know your turnover is OK when you stop losing employees you want to keep. Turnover has gone up in the U.S. in each of the past three years and finding qualified replacements in some fields has never been more difficult. We find that those who say, “Some turnover is good” are only right when non-performers leave.
Feel free to email me if you’d like to learn how to place dollar values on turnover and engagement at email@example.com
SOURCE: Dick Finnegan, CEO of C-Suite Analytics and author of Rethinking Retention in Good Times and Bad and The Power of Stay Interviews for Engagement and Retention.