Employee turnover isn’t something the staffing industry talks about in a lot of detail, but it should be. Negative attrition, beyond a basic metric in service level agreements (SLAs) and key performance indicators (KPIs), can have widespread and detrimental effects on enterprise workforce programs, especially those run by a managed services provider (MSP). Workers who suddenly quit their jobs present obstacles for the businesses relying on them. In an MSP engagement, departing talent can be downright disruptive. IBM patented an algorithm that purports to predict employee flight risks with up to 95% accuracy. This could be powerful tool in tight labor markets. But until this level of AI becomes commonplace in HR technology, there are some best practices we can adopt to mitigate the potential pitfalls. In his article for Harvard Business Review (HBR), Jon Christiansen discussed eight things leaders do to make employees quit and the steps they can take to correct them. However, they can easily be tailored to any MSP or enterprise-wide staffing solution.
Losing Workers Is a Business Loss
Even when markets favor employers—meaning candidates aren’t sitting in the catbird seat during hiring efforts—treating workers are fungible human capital or easily swapped assets never really behooves an organization. Anyone who’s ever had the transmission repaired on a car surely recognizes that cogs are not actually inexpensive or easy to replace. People, the gears that spin the engines of business, are no different. Hiring and firing, it turns out, are expensive and onerous affairs.
- On average, it takes between 24 and 30 days to fill a job opening.
- The hiring process costs employers up to $4,000 per worker.
- Roughly 25% of employees leave their positions in the first year.
- As cited by Valerie Bolden-Barrett in HR Dive, “Employee Benefit News (EBN) reports that it costs employers 33% of a worker’s annual salary to hire a replacement if that worker leaves. In dollar figures, the replacement cost is $15,000 per person for an employee earning a median salary of $45,000 a year, according to the Work Institute’s 2017 Retention Report. The study of 34,000 respondents concluded that 75% of the causes of employee turnover are preventable.”
So if we add the figures from Glassdoor and EBN, employers could be staring down a nearly $20,000 loss in revenue for each departing worker. Then, tack on another $4,000 and 24 days to renew the hiring initiative for a replacement. The good news is that experienced staffing suppliers account for the possibility of negative turnover and have candidate pipelines available to expedite the fulfillment process. But interruptions to the program may still manifest.
“During my fifteen years working in data science,” Christiansen wrote in HBR, “I have run countless predictive models on employee retention, student retention, and customer churn across industry verticals, including healthcare, energy, and higher education. Through my work, I’ve identified eight common leadership mistakes that help explain this why.” By understanding the catalysts that force attrition, we can take steps to prevent negative turnover and foster retention. Here are five of Christiansen’s eight principles that can help facilitate high retention in MSP programs.
Set Consistent, Clear, and Prioritized Goals and Expectations
Goals or performance expectations that seem unclear or even conflicting to workers can lead to a huge drop in job satisfaction. Christiansen offered this scenario: “A sales representative at a rental car company has to choose between serving her next client, or correctly logging her previous client’s information into the system. Her manager has made it clear that “slow service is poor service,” but she knows that improperly entering customer information could get her fired. Choosing between these two tasks causes her to experience high levels of stress on a daily basis, and as a consequence, she hates her job.”
By creating a list of cascading priorities and ranked job duties, staffing suppliers and MSPs establish stability, productivity, and clarity in the work, ensuring that no contradictions or overlaps exist. And when challenging situations arise, no one should be confused about how to manage them. An example list for Disney workers includes the following, in order of importance.
- Performance and presentation
Remove Process Constraints
“Process constraints often occur when a lack of information, resources, or another factor, stops an employee from doing their job,” Christiansen explained. We all understand the need for rules, procedures, and reporting hierarchies, but too much bureaucracy can hobble performance.
- Create workflows that empower talent and give them as much control as possible over their outcomes.
- Work with MSPs to ensure that your staffing firm has the control, resources, and information it needs to overcome constraints that could impact workers.
- Host regular and recurring dialogs with workers to get vital feedback about constraints and concerns. Communicate those issues to the MSP and seek mutual resolutions.
- Don’t back down from difficult conversations about processes with MSPs or hiring managers; continuous improvement and high performance thrive in transparency and collaboration.
Put Talent in the Right Roles
Knowledge and skills waste, Christiansen noted, become problematic for skilled and motivated workers, leading to waning morale and general dissatisfaction. Today’s talent want to feel recognized and have their contributions valued.
- Work closely with MSPs, which should in turn work closely with client hiring managers, to develop accurate job postings that precisely reflect the roles, responsibilities, qualifications, and skills needed for the role.
- Don’t get caught up on nice-to-haves, alma maters, or extraneous qualities that don’t directly or materially contribute to the success of the position.
- Carefully review resumes for alignment with the job and the abilities of the candidate; don’t rely exclusively on keywords matched by the ATS.
- Host behavioral and targeted phone interviews to further vet the candidate and assess optimal fit.
- Validate with the MSP that the anticipated task load and published position requirements remain clearly in sync.
- If problems or inconsistencies are detected, resolve them immediately before hiring.
Promote a Safe Culture
“Hostile environments are easy to spot,” Christiansen observed. “If you notice your team members being overly agreeable or quiet in meetings, that’s a bad sign. When employees fear their thoughts or ideas will be met with repercussions, they tend to behave this way, which means you are likely operating in a fear culture.”
The strongest, most creative teams are those where brainstorming, wild ideas, healthy dissent, and diverse opinions are welcomed. Cliché as it sounds, “there are no bad ideas” should be the mantra in designing a safe environment. Any idea can trigger another, perhaps better, solution. The trick is to keep the momentum constant and flowing.
- Challenge workers to provide authentic opportunities to take on greater responsibilities, encourage skills development, and cultivate professional growth.
- Partner with talent to make them participants in the client’s mission and their own career trajectories.
- Coach workers constructively while championing the development of perspective-taking and problem-solving behaviors.
- Express gratitude for jobs well done, making sure that appreciation and recognition are visibly acknowledged.
Don’t Waste Resources
Resource waste comes into play when workers are pulled from core tasks to attend non-essential meetings or address low priority issues. Here’s another scenario posed by Christiansen in his article: “Pretend you are a marketing manager. You have until Friday to roll out a new campaign. It’s Tuesday, which should theoretically leave you with plenty of time. But there’s a problem. You have six meetings for a total of four and a half hours today. The following day, you have seven meetings, which eat up six hours. On Thursday, you have to attend a team training session for five hours. So, when are you supposed to work?”
These situations offer untold challenges for the program. Talent get frustrated and burn out quickly, which leads program stakeholders to erroneously believe that employees are looking for ways to avoid work. In fact, the opposite is true: they are trying to get back to their jobs.
- Work with MSPs and talent to itemize all the tasks before a deadline and prioritize the most important.
- Assess the relevance of non-core requests. If they make no sense or will significantly impede progress, confer with MSPs to bring in other resources to manage the workload, skip trivial meetings, or alter the deadline.
- Prior to a big deadline, plan all activities in advance and present the MSP with the plan. If shifts or unforeseen requests pop up, work together to take accountability while ensuring that talent have the space to complete their work without unnecessary distractions.
As Christiansen summed up, “It’s true that there is no way you can control every aspect of your team’s work experience. If someone wants to leave bad enough, sometimes they just will.” But if staffing providers partner with their MSP program managers and advocate for the needs of their talent, many of the factors that contribute to negative turnover can be prevented. As always, communication is key.