Have you ever thought: “Why isn’t that person more committed to their job? Why don’t they work as hard to do a better job like so-and-so does?”
Or have you ever felt the need to say, “You don’t seem committed to the job”, to an employee?
It may be that you have heard other managers say those words, but at some point in time, as managers, we face this issue with an individual we manage and sometimes with an entire team or organization.
Once there was a team of bond traders at a large investment bank. They produced millions upon millions in revenue for the bank and sometimes they were well compensated for it. But there was just one problem. New management, brought in from outside, was invasive, overbearing and even verbally abusive at times. On top of this, the Managing Director lacked a strong grasp of the business. Work-life balance was near impossible with the micro-management. The team made this clear in the annual 360 Review.
To solve the problem, they were put through hours of team building exercises, personality tests and diversity training. The MD was assigned a leadership coach. What happened the following year? As it was described to me, the team convened and agreed: “Give them all high marks. Let’s not go through that again.”
“We train them. Then they leave. Train new people. They leave.”
This is what was happening to one client until they finally decided it was time to stop being the free training center for their competition.
You may not have a revolving door, but the cost of losing an employee is so high, every level of management must be concerned with retention.
The direct cost to replace salaried employees is estimated to be at least 6-9 months of pay and can be as high as two times the annual salary for a high-earner. For low-paid high turnover employees, the cost is at least 16% of their annual pay.
In addition to the direct costs, frequent turnover has a negative impact on employee morale, productivity, and revenue growth. Lost knowledge is a big problem as well, to say nothing of the stress and increased workload on other employees while new people are found, hired, and brought up to speed.