know what you are thinking about turnover. As a practical HR pro, you already
know that all turnover is not created equal.
You were reminded of that reality when your own employee relations
nightmare (we’ll call him Jim) resigned voluntarily after causing 16 unique complaints
from other employees because of his "opinions." (A new record! Unfortunately, none
of them were quite enough for you to discipline or terminate him.) Jim was good
turnover—really good turnover.
You also agree with Workforce Management columnist
John Sullivan’s
point that losing a high
performer hurts more than an average performer and should be weighted accordingly.
So now you’re ready to take action and revamp your turnover
reporting system. To get started, you roll through a month’s worth of terminations
and classify them as good or bad turnover. You move through a couple easy ones,
then you get to the following scenario—a low performer who voluntarily resigned
and then filed an EEOC charge in reaction to one of Jim’s "opinions." Is that good
or bad turnover?
And that, my friends, is the rub when it comes to reporting
good versus bad turnover. Everyone agrees with the concept, but as the HR pro reporting
on it, you have to dig into all the termination scenarios: How many are there—100,
maybe 200? What about the combinations determining which turnover bucket they belong
to?
Just as important, you have to ensure that your stakeholders
(managers and department heads) agree with how you code them as well. Try rolling
out the new good versus bad turnover report without a feedback loop and see what
happens. It’s an emotional powder keg, especially for the managers who end up with
high bad turnover.
How do you get your head around all the variables? While each
company is different, here’s the initial list of scenarios I classify as "good turnover":
-
Good turnover includes people who have been fully trained
but still do not meet expectations from a performance standpoint after a reasonable
period of time. You trained them, they’ve had time, and they’re still not where
you need them to be. This one is pure judgment. When do you make the cut? Make the
move at the right time and it’s good turnover; cut too early and it’s bad turnover.
-
Good turnover includes involuntary terminations. After all,
if you made an organizational decision to terminate the individual, you did that
with all factors in mind and came to the conclusion your world was better without
the individual. Play on and code it as good turnover.
-
Good turnover can include organizational moves that raise
your company’s productivity and profitability. No one likes the impact on employees
caused by organizational realignments, location closings, etc. You can lose valuable
knowledge and skills. But if such moves result in a more profitable and efficient
organization, it’s hard to classify the impact as bad turnover.
-
Good turnover includes voluntary terminations involving employees
widely reported to be disruptive to your company’s culture. This means your organization’s
Jim. Coding individuals like him as good or bad turnover is a judgment call you
have to make.
What about bad turnover? Bad turnover includes losing high
performers, but there are other factors as well:
- Bad turnover includes people you have promoted who decide
to leave the company. While a promoted employee could be struggling to meet expectations
in their new role, that’s rare. You invested in them, told them you loved them via
promotions, and they walked. That can’t be good. Multiple studies confirm that the
loss of employees who have been promoted hurts more than average churn.
- Bad turnover includes new hires who leave your company (whether
voluntarily or involuntarily) shortly after joining. Define the time frame based
on your culture—60, 90, 180 days, etc. If the new hire leaves within that period,
the organization missed on the hire. Multiple reasons could be at play—wrong skills,
wrong cultural fit or the wrong motivational fit. The bottom line is that your interviewing
process failed to control for the factor in question. As a result, it’s bad turnover.
- Bad turnover also includes those leaving the company (voluntarily
or involuntarily) who end up suing you. If you didn’t manage performance and provide
feedback to the extent you needed to and incur a lawsuit or an EEOC charge as a
result, your cost of turnover goes way up. It doesn’t matter if the lawsuit has
merit; it’s not a good thing.
- Bad turnover also includes exiting employees deemed as "exceeding"
expectations and who have no other baggage that brings the organization down. This
was Sullivan’s main target for calculating bad turnover. These are star employees
who drove revenue, so you loved them, told them, paid them (hopefully) and they
left you anyway. It’s time to look inward.
That’s my initial list. You’ll undoubtedly come up with more,
and you’ll also need to find a way to deal with classifying the various combinations
of factors as you develop your enhanced turnover system. It’s a process worth your
time, but more detail-oriented than the initial theoretical conversation of classifying
good versus bad turnover would suggest.
What’s next after you complete classifying all the different
types of terminations as good or bad? How about coming up with the unique cost of
turnover for each of the 100 scenarios? Hire a statistician, because you’ll need
the help.
Workforce Management Online, July 2007 -- Register Now!
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