Are you leaving? Why it matters…

If we are offering a competitive compensation, why are we loosing key people? What are we doing wrong?

Turnover rate is a metric that most companies track and that should be relatively easy to calculate.   It is common practice to compare it with industry rates and/or regional rates to assess how bad or how well a company is doing on retaining employees.

In most cases if the company’s turnover rate is close to the industry norms, it is checked as good, and additional thought is not given.  Some companies look at historical data searching for anomalies and trends.

These are good analyses to make, but understanding why we are losing people it is a lot more important and equally more complex to achieve.  Exit interviews are an intent to identify potential underlying issues behind employees’ turnover; but, how effective are exit interviews? Are they really designed to identify the main factors? Are the results communicated?

I do not know you, but most leaders have never received an analysis from HR on why people leave.  The few fortunate ones that have the opportunity to get some information have never seen the questions being asked.  Most of us have heard things like: “The market is very competitive” or “our company’s turnover rate is good”, but the questions, the answers and data analysis are usually a mystery.

Before I keep going, let me clarify that I am not implying that the HR department is trying to keep leaders in the dark or  they are not interested on finding the root cause of the problem. On the contrary,  they do all they can with the resources they have; confidentiality rules and legal boundaries make sharing information a difficult quest.

Exit interviews have the potential to be a powerful tool to identify the main causes of employee turnover, but In order to obtain relevant information, a very thoughtful design is required.

What is asked, how is it asked, how are responses structured, what data is collected, how the data is combined, what statistical methodology is utilized, and how the data is displayed, will define how useful or not, exit interviews might be.  Of course, a solid communication plan and commitment from leadership to take action are fundamental factors towards improving employee’s retention.

Okay, I got it, if you are not familiar with data analytics, the above paragraph sounds like a lot; but you are not alone.  Your organization’s marketing or IT departments might have a data analytics team that can help you, or hire a consultant, it will be worth every penny.  Creating an effective exit interview process will transform a busy, information collecting task to a solid data analytics process, where it is easy to identify factors that by acting upon, will improve the organization retention rate.

In future blogs I will elaborate on the structure elements, underlying factors and other tools that can be used to identify actionable factors impacting employee retention. In the meantime, share with us your thoughts, your success stories and frustrations.   Does your organization have a comprehensive turnover analysis and retention improvement process?

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Quote People are definitely a company’s greatest asset...A company is only as good as the people it keeps.

Mary Kay Ash

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