Hello, and welcome to the Service Contractors Business Presentation of the Month. This monthly CDWeb series represents yet another step in accomplishing Brandi and Associates’ vision of teaching contractors how to run profitable businesses. Each month, a different national speaker from throughout the service and trades industry shares dozens of cost-reducing, profit-increasing ideas to help you become a more profitable company.
It’s happened to every listener. One day, with no warning, one of our employees hands in their two-week notice, or perhaps simply leaves with no notice. You’re in shock.
What happened? Why did they leave? Why didn’t I notice a problem before it got to this point? Sound familiar? Well, it does for most of us. They say an ounce of prevention is worth a pound of cure. Well, this presentation by Lee Branham is going to provide several ounces of prevention by sharing about seven reasons employees leave their company.
Lee Branham is founder and principal of Keeping the People Incorporated, Overland Park, Kansas, a talent management consulting firm which helps organizations analyze root causes of turnover and employee disengagement. His previous experience includes serving as leader of the talent management practice for Wright Management Consultants, Heartland Region. Also, in cooperation with the Saratoga Institute, Lee wrote The Seven Hidden Reasons Employees Leave, How to Recognize the Subtle Signs and Act Before It’s Too Late, which covers the root causes of employee disengagement and turnover based on post-exit surveys of more than 19,700 employees in 17 industries.
Released in January 2005, this book was selected by BusinessBookReview.com and the Library Journal as one of the top 30 business books of the year and was released in audio format by Executive Sound View. Lee received a bachelor’s degree in English Literature from Vanderbilt University and has two master’s degrees from the University of Missouri-Columbia. He has 25 years experience in human resource consulting, including three years at General Dynamics.
He speaks frequently on the topics of employee engagement retention, career development in organizations, employment practices, workforce trends, leadership, and management development. He’s been interviewed on National Public Radio, published in the Harvard Business Review, and quoted in BusinessWeek, the Los Angeles Times, the Chicago Tribune, and many other newspapers through the Associated Press as an expert on employee retention. Lee is highly qualified to share his expertise, so sit back, relax, and take lots of notes.
It just might help you keep from losing one or more of your key employees. There are often hidden, elusive motivations that cause capable employees to begin questioning their decision to join a company, start thinking of leaving, eventually disengage, and finally leave. These motivations are often hiding in plain sight.
Lack of recognition, unfulfilling jobs, limited career advancement, poor management practices, untrustworthy leadership, and dysfunctional work cultures. What is not often clear is in what way these things are hidden and from whom. I am Lee Branham.
In my book, The Seven Hidden Reasons Employees Leave, I knock down the wall that separates employee from employer and even management from senior leadership in an effort to forge an open discussion on employee disengagement and what organizations need to recognize and actively pursue in order to retain their best and brightest people. Using interview and survey data, I isolate each reason, tell companies what to look for, and translate the needs and desires of each into a common language, enabling companies and their valued employees to better understand one another. Employee turnover is not an event.
It is a process of disengagement that can take days, weeks, months, or even years until the actual decision to leave occurs. There are several sequential and predictable steps that can unfold in the employee’s journey from disengagement to departure. First, an employee starts the new job with enthusiasm.
Then, he or she questions the decision to accept the job, thinks seriously about quitting, tries to change things, resolves to quit, considers the cost of quitting, and then passively seeks another job. Next, he or she will prepare to actively seek a new job, then actively seek it, then get a new job offer, and then either finally quit to accept a new job, or quit without a job, or stay and disengage. Many managers are so busy or preoccupied that they wouldn’t notice where their employees were in the continuum if they wore signs around their necks that proclaimed, trying to change things, or becoming less engaged every day.
Managers need to better understand the signs of discontent before they lose their best and brightest people. There are two distinct periods in an employee’s thought process when he or she considers leaving a company. The first period is the time between the employee’s first thoughts of quitting and the subsequent decision to leave, when disappointment and even bitterness can set in due to an array of possible circumstances.
The second period of the deliberation process is the time between the employee’s decision to leave and the actual leaving. The chances of a manager gaining renewed commitment from an employee in this period are not very good. This is why managers must keep their antennae up and be alert to the signs that an employee is just starting to disengage when there is still time to do something about it.
Employees begin to disengage and think about leaving when one or more of these four fundamental human needs are not being met. The need for trust, the need to have hope, the need to feel a sense of worth, and the need to feel competent. The first reason is the job or workplace was not as expected.
Every day new hires enter organizations with a wide range of illusions and unrealistic expectations. Some stay and adapt, some disengage and stay, and many disengage and leave. At the root of their disenchantment is an expectation that was not met.
Quite simply, unmet and unrealistic expectations cost businesses untold millions of dollars. When an employee realizes that the employer cannot meet a key expectation in the contract, there is often a feeling of having been betrayed, as if a real contract has been broken in bad faith. This can become the shock or turning point that begins the downward cycle toward disengagement and departure.
The more clearly an employee understands his or her own expectations, the higher the probability of a match in expectations. Many new employees fresh out of college, however, are only dimly aware of their needs and desires. That problem is compounded when the organization is also not clear about what it expects, which is often the case.
The psychological contract changes over time as the expectations of the employee and the organization change. With each change in expectations, open communication serves to keep both parties in alignment or may lead to a mutual agreement to renegotiate or break the contract. People complain of poor management when what they want is good management.
They complain of favoritism when what they prefer is an even playing field. Along the same line, in describing the seven main reasons employees leave, one comes ever closer to pinpointing what it will take to make them want to stay and be more fully engaged. Those reasons are the job or workplace was not as expected, a mismatch between job and person, too little coaching and feedback, too few growth and advancement opportunities, feeling devalued and unrecognized, stress from overwork or work-life imbalance, and finally, loss of trust and confidence in senior leaders.
Let’s take a look at each of these reasons and how your company can overcome them to become an employer of choice. The following practices have been found to significantly raise the probability of new hire success, satisfaction, and longer-term retention. Conduct realistic job previews with every job candidate.
With every potential hire, initiate a frank and open discussion of job activities, performance expectations, immediate work team, working conditions, rules, policies, work culture, management style, the organization’s financial stability, or other topics where surprises need to be minimized. Hire from a pool of temp-to-hire, adjunct staff, interns, and part-time workers. When workers come aboard on a contingency basis, they have a chance to experience the ups and downs of the job firsthand before they and the organization have made the commitment to a full-time relationship.
Hire from current employee referrals. Current employees tend to realistically describe the job and workplace to those they are referring. They have a vested interest in maintaining the friendship, and they are generally motivated to minimize surprises.
Create a realistic job description with a short list of critical competencies. When a company’s list of ideal candidate competencies is too long, it unwittingly narrows its pool of candidates. The company also lays the groundwork for another problem later on, that the new hire will not be able to meet its performance expectations.
Other ways to raise the probability of new hire success include allowing team members to interview candidates, hiring from your pool of current employees, creating a way for candidates to sample the on-the-job experience, and surveying or interviewing new hires to find out how to minimize new hire surprises in the future. The third reason employees leave is too little coaching and feedback. Performance coaching and feedback are essential for employees because they help employees answer four basic questions.
Where are we going as a company? How are we going to get there? How do you expect me to contribute? And how am I doing? The answers to these questions constitute much of what gives meaning to an employee’s efforts. Companies need to give feedback and coaching to make sure that employees’ efforts stay aligned with the organizational goals and the expectations of direct supervisors. This alignment is a necessary precondition for employee engagement.
Here are some practical tools and ideas that managers can use now to assign tasks so that workers can be more engaged through the use of their motivated abilities. Conduct entrance interviews with all new hires. Meet with new hires during the first week on the job with the specific purpose of uncovering their greatest strengths and talents.
Work to enrich the jobs of all employees. Some jobs are more easily enriched than others, but it can be surprisingly easy to make a significant impact with employees and increase retention. And finally, delegate tasks to challenge employees and enrich their jobs.
Employees might not have the patience to pay their dues, but you can enrich their jobs and provide them a more meaningful role in the future by delegating tasks you might not have considered before. Companies with strong reputations for selecting the right talent and keeping employees well matched with their jobs seem to have certain best practices in common. Here are five.
Make a strong commitment to the continuous upgrading of talent. The best employers have a serious, resolute mindset about talent that begins with a fundamental belief that the organization’s future depends on getting and keeping the right people in the right jobs. And they leave little to chance when it comes to recruiting and interviewing.
Follow a consistent and thorough talent forecasting and success factor analysis practice. Before recruiting, your organization should engage in a talent forecasting process based on key business objectives that drive talent needs. Cast a wide recruiting net to expand the universe of best-fit candidates.
The larger the selection, the greater the chance you’ll get a good fit. Avoid imposing too many restrictions in terms of job requirements. Follow a purposeful and rigorous interview process.
Train all hiring managers in behavioral interviewing in which candidates answer questions with stories of how they handled a given situation in the past. Track measures of hiring success. Track the quality of hires, not just cost per hire, by quantifying the qualitative aspects of each candidate.
The fourth reason employees leave is there are too few growth and advancement opportunities. So much has changed in the worldwide business climate and in the way businesses now operate that the impact of these changes on the careers of individuals working in organizations needs to be acknowledged. Downsizing has changed the loyalty contract between employee and employer, and it has also heightened the level of stress over job security.
Focusing on short-term, bottom-line results has created pressure on management to reduce costs and push workers to do more with less. Productivity gains have come at a cost in reduced job satisfaction, stalled job creation, and stagnant careers. Most employers of choice communicate clearly that employees must take the initiative in their own career development.
They also give their people the tools and training needed to accomplish this, enabling them to be the best they can possibly be. Here are the kinds of practices that serve to maintain a balanced approach to providing employees with the growth and development opportunities they need to stay and to stay engaged. Provide self-assessment tools and career self-management training for all employees.
Organizations should provide workshops, software, or other tools to aid employees in increasing their self-awareness and enhancing their goal-setting efforts. Offer career coaching tools and training for all managers. Provide company-sponsored training and tools to help managers be better equipped to fulfill their responsibilities as coaches.
Provide readily accessible information on career paths and competency requirements. Give employees access to job descriptions, listings of competencies, and educational requirements that they will need to qualify for other positions within the company. Create alternatives to traditional career ladders.
Do not penalize top performers by forcing them to pursue management positions as their only route to higher pay. Create higher-level technical positions with increasing responsibility and commensurate pay. Other options for offering employees growth opportunities include keeping employees informed about the company’s strategy, direction, and talent need forecasts, building and maintaining a fair and efficient internal job posting process, showing a clear preference for hiring from within, eliminating HR policies and management practices that block internal movement, creating a strong mentoring culture, and keeping the career development and performance appraisal processes separate.
Building an effective talent review and succession management process and maintaining a strong commitment to employee training are also effective methods for creating growth opportunities. The dynamics of manager-employee relationships are complex, but in the best-case scenarios with a good-faith effort and the right approach to coaching, employees can be reengaged. Consider implementing these practices.
Provide intensive feedback and coaching to new hires. Plan how you want employees to spend their first week on the job and plan to spend time with them during the initial period. Discuss your performance expectations in detail and ask the employee to draft a performance agreement that summarizes his or her objectives.
Create a culture of continuous feedback and coaching. Conduct informal, on-the-job feedback conversations with your employees in addition to formal performance reviews. Train managers in performance coaching.
Make sure your managers understand the five-step process for successful coaching. Get the employee’s agreement that a problem exists. Mutually discuss alternative solutions.
Mutually agree on action to be taken to solve the problem. Follow up to measure results. And finally, reinforce any achievement when it occurs.
Other ways to improve coaching and feedback include making the performance management practice less controlling and more of a partnership, terminating non-performers when best efforts to coach or reassign don’t pay off, and hold managers accountable for coaching and giving feedback. The fifth reason employees leave is that they feel devalued and unrecognized. Everyone wants to feel important, yet many organizations manage to make their people feel quite the opposite.
It could be seen as a lack of simple appreciation or a greater focus put on making numbers and not valuing employees. Some employees might feel like a mere number, that no one in any kind of position above them listens to them or even knows they exist, much less work there. Managers who do show some appreciation might not show it in a timely manner, or the rewards given might have little, if anything, to do with what the employee truly finds valuable.
Managers might be reluctant to recognize employees for a number of reasons. Many managers might simply not know how. Perhaps they came up in the company with superiors who took a laissez-faire attitude toward recognition.
Others might simply fail to pay enough attention to the performance of their people to know when something worth recognizing has been done. The sixth reason employees leave is stress from overwork and work-life imbalance. It is sobering to consider all the things there are to be stressed about in the workplace.
Overwork, personality conflicts, forced overtime, disorganized supervisors, gossip, harassment, prejudice, and so many others. Workers get stressed when they must sacrifice family time to work extra hours, when they must deal with the insensitivity of some co-workers, when they really need a personal day but cannot take one because their company does not offer them. These are the people who consistently work late, work through lunch, work through sickness, take work home, and express frustration in many unhealthy ways.
Company leadership must determine whether their organization’s culture is unhealthy or even toxic. When you force workers into choosing between having a life and a career, your organization has a toxic culture. Workers are not merely resources, they are people.
You should be empowering them, not attempting to control them. Address these things, this culture, or your employees’ will by leaving. Here are some of the best pay practices that many preeminent employers have begun to embrace to better engage and retain their talent.
Offer competitive base pay linked to value creation. The need to provide increased value to customers has led many companies to link base pay more to value creation and less to rank or years of service. This results in some companies paying lower ranked employees more than their managers, if they are crucial to providing value.
Reward results with variable pay aligned with business goals, and reward employees at a high enough level to motivate higher performance. Variable pay awards to employees should be higher when the bottom line impact of their results is significant. When that result is difficult to achieve, or when it takes longer to achieve, and when base pay is more at risk.
Use cash payouts for on-the-spot recognition. Reserve 1 to 2 percent of your base pay budget for cash payouts or lump sum payments to recognize top performers. Employers can also involve employees and encourage two-way communication when designing new pay systems, and monitor the pay system to ensure fairness, efficiency, consistency, and accuracy.
Other ways to show employees they are valued include creating a culture of informal recognition founded on sincere appreciation, making new hires feel welcome and important, asking for employee input, then listening and responding, keeping employees in the loop, giving employees the right tools and resources, and finally, keeping the physical environment fit to work in. The final reason employees leave is loss of trust and confidence in senior leaders. Senior leaders are challenged with creating a culture of trust and integrity that strengthens the bonds of employee engagement.
While this challenge is shared by all managers and employees, it is incumbent on senior leaders to set the tone and the example. This isn’t always easy, particularly when employees already have a number of issues with their managers and leaders. They complain about a basic lack of trust and integrity in leadership, they might feel management is out of touch with day-to-day reality, or they might feel that leadership is concerned only with their own greed and not with the needs and concerns of workers.
You can see these issues manifest themselves in the effort and conduct exhibited by the workforce, in a lack of enthusiasm in the workplace, and in the increasing complaints and questions about policies and practices. You can see it in managers who begin to question decisions and actions of senior leaders, or even in active resistance to leader initiatives and change efforts. Employers of choice enable employees to maintain a life balance by doing the following.
Initiate a culture of giving before getting. Make the first move in maintaining employee loyalty. If you demonstrate an initial willingness to trust your employees by giving valued services, they are likely to reciprocate in kind.
Tailor the culture of giving to the needs of key talent. Match your benefits and work-life services to the needs of your people in the form of nontraditional work schedules, extra holidays, or simply improving the physical surroundings. Build a culture that values spontaneous acts of caring.
Relieve employee stress and generate more loyalty by sending your people cards or gift certificates, creating weekly rituals such as pizza on Thursdays, or simply providing a sympathetic ear when they need one. Building social connectedness and harmony among employees, as well as encouraging fun in the workplace, are other ways that encourage employees to stay. Here are three things senior leaders can do to combat these impressions to offset and reverse a loss of trust.
Inspire confidence in a clear vision, a workable plan, and the competence to achieve it. One of the first requirements of trust is competence. People will only follow leaders they deem to be capable.
Employees want to know that the organization will be successful and that they can be assured of their place in it going forward. You must be able to inspire that confidence and make decisions and directives that reinforce that confidence. Back up words with actions.
Do what you say you are going to do. There is no easier way to cut off employee cynicism and disengagement. And finally, place your trust and confidence in your workforce.
Take the opportunity to engage and inspire your people by enacting policies that show you trust them. If you have an authoritarian or micromanaging style, get rid of it. When you give that kind of power away, you increase the collective power of the organization to innovate and meet new challenges, thus enhancing your own power in the long run.
As always, we welcome your feedback on each month’s presentation. Feel free to give us a call with your comments, or if you prefer, you may fax or email our office. If you’re serious about profitable growth, you might want to consider attending one of our three-day basic business boot camps.
Check out our website at www.grandeassociates.com or call us at 1-800-432-7963 for a current listing of dates and locations. The Service Contractors Business Presentation of the Month is produced and distributed by Grande and Associates. If we can be of service to you, give us a call.
1-800-432-7963 Until next month, remember, invest your time and invest your money in those things that will reproduce.
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