Employee retention is the biggest challenge organizations will face in the next decade. The reality is that baby boomers are retiring at a rate of 10,000 per day. There are simply not enough people to take the spots of the people that are retiring. Trying to find replacements is difficult…so when you do find them, you need to be able to retain them. As an employee retention speaker and employee retention author, I have worked with organizations that address their employee retention issues for different reasons.
The first and most frequent reason is money. The bottom line is that having a revolving door of people costs an organization a lot of money. Those costs drop right to the bottom line. One of my clients, a metal casting company determined that it was costing them hundreds of thousands of dollars to hire new employees, train them and ramp them up to the point where they were producing quality parts. The owners were turning down sales because they didn’t have a fully staffed plant because of their employee turnover. They took the approach of educating supervisors and managers on what drives employee turnover, getting their input on how to address those drivers in their organization and then taking certain key actions that helped them to reduce turnover by approximately 30% in the six-month period after the employee retention workshop.
Another compelling reason is the stress that employee turnover has on the people who lead the teams and the departments. In this case, the supervisors and managers who were leading the people in the organization were so stressed because of the constant turnover that they were experiencing that it was starting to take a toll on them emotionally. The HR Director and the VP of Operations saw the toll it was taking on these leaders and realized it was not sustainable in the long run. They also realized that the reason that much of the turnover existed was because of the way their supervisors were leading. As a result, they embarked on a 6-month leadership training program to train and educate leaders on how to lead the millennials and Gen Z employees so that these employees wanted to stay with the organization. Beyond starting to reduce the stress of excessive turnover on the supervisors and managers, they are also experiencing operational gains because of the change in leadership style.
Lastly, and most importantly a reason for addressing the issue of employee retention is organizational survival. When you can’t keep the people you need to run your production facility and your competitors can, you are out of business. That’s reality. In the next decade, we will find that organizations that don’t get a handle on their employee turnover will find themselves unable to compete with their competitors. When this happens, an owner’s years of working to build a business will be flushed down the toilet or stockholders will suffer massive declines in the value of the business. One client organization in a rural area with a 1.8% unemployment rate in the county where they manufactured product was simply running out of people. They had to stop the employee turnover or the business would be in jeopardy. Using a combination of an employee retention workshop to get buy in from supervisors and managers and a focused Kaizen event on employee retention, the organization saw a significant drop in employee turnover in the next year so that they now have a stable workforce. In fact, they were not only able to survive but are now able to grow.
Regardless of the reason for embarking on an employee retention initiative, delaying the inevitable impact of employee retention is sheer folly. The key to attacking employee turnover is to recognize that if you don’t take focused action, the issue is not going to go away. The days of thinking that you can simply replace people are gone. Long gone. And, the reason for taking action are compelling ones. Clearly, it is in the best interest of any organization and the leaders who must bear the brunt of its impact to act on this business issue.