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6 Ways to Reduce Employee Turnover
Introduction
In the first four months of 2016, the cumulative employee quit rate—a.k.a. the percentage of workers leaving their jobs on purpose–was higher than it had been for any four-month period since 2007. That’s a big deal: It means employers can no longer rely on a bad economy to keep their workers from leaving.
Good employers don’t want employees to feel “trapped” by a bad economy, but in the last few years, a lot of employers have gotten a little complacent anyway, putting less effort into employee engagement and retention than they could be. The proof? Less than one-third (31.5%) of U.S. workers were engaged in their jobs in 2014, according to a Gallup poll, and a full 17.5 percent were “actively disengaged” – i.e. phoning it in and looking for a new job.
That’s not good for productivity, nor is it good for employee retention, as even your best employees, if treated poorly, will eventually start to slack off and eventually look for a new job. But even if you’re doing everything right, some employees are going to leave, whether for greener pastures or because they simply aren’t the right fit. In fact, in 2011, companies spent $45 billion on recruiting only to see 46 percent of new hires still leaving after a year. Yikes!
The Costs of Turnover
Turnover can be costly; add up all the time training a person who didn’t work out, the lost opportunity costs of a vacant position, the time managers spend interviewing instead of managing, and you’re looking at a significant spend: ERE Media estimates that the cost of replacing an entry-level employee is 30-50 percent of that position’s annual salary, rising with higher level workers.
Why Turnover Happens
Salary and benefits certainly play a role, but pay is not the leading factor in job satisfaction. It’s up there for sure, and paying competitively is important—but more than that, employees want to feel valued, that they are part of something bigger, and that they are a fit with their company’s culture. People often leave jobs because of a disagreement with a manager or colleague—in other words, they’re not going to a new job but away from the job they have with you. Here’s how to put that to a stop.
6 Steps That Can Reduce Turnover
You can reduce turnover, but never entirely eliminate it. That’s OK, as that’s the goal! You’ll always have a few low performers who you may want to gradually part ways with. For the rest, though, you want to keep ‘em. Here are six steps that can help.
Start with the right fit
A third of employees knew whether they would stay with their company long-term after their first week, according to ERE. Those who can tell they are leaving were likely not good fits to begin with.
A personality test is one way to help determine if new employees will fit in to a new job, and these tests are growing in popularity.
It’s important to use such tests as guidelines only, and to use them to measure actual workplace fit—for example an extrovert who loves working in teams may not be the best fit for a remote, work-from-home position—not amorphous things like “we like the same baseball team.” “Fit” used in this way can be a euphemism for justifying cultural bias, which can lead to a less diverse workforce.
Instead, tests should focus on “data-driven analysis of what types of values, traits and behaviors actually predict on-the-job success,” according to Kellogg School of Management professor Lauren Rivera.
Personality tests can also give employees insights into how they can best work with coworkers, which can stave off conflict. Since one of the major reasons people quit their jobs is due to personality conflict with a boss or coworker, preventing conflicts from happening is an important way to reduce turnover.
Ensure your compensation package is in line with the marketplace
This means salary and benefits, but also perks like flex time, compressed schedules, or telecommuting when appropriate.
Pay isn’t the number one factor in retention, but it certainly doesn’t hurt. Check out sites like salary.com for data to help you learn what similar positions pay in your market. Remember, your goal is to attract good talent and pay them fairly.
If you can’t raise salaries, can you allow telecommuting, offer “summer Fridays” or otherwise see if you can be flexible about how your employees work? Other popular arrangements include job sharing—where two people work part-time to make up one full-time-equivalent role—or paying employees by the project, which allows them to take more time off between projects if they want. In this arrangement, says Entrepreneur magazine, the employee “functions much like an external consultant who’s hired on a project basis.”
With the right people—those who are motivated by your company’s mission and feel they have a stake in its success—you’ll actually see productivity go up, not down, with these types of arrangements. And an Accenture survey found that workers are much more likely to stay at their company if they can work flexibly.
Use contests and incentives to help keep workers motivated and feeling rewarded
Done right, these kinds of programs can keep employees focused and excited about their jobs.
One company, Engage Direct Mail, has found a way to motivate all employees—even those who aren’t interested in competing. CEO Dennis Hoffman told Inc that setting quarterly goals with rewards attached, such as iPods for the whole team or a trip to a nice restaurant, encourages employees without relying on salary bonuses.
The group nature of these rewards is important, says Hoffman, because “somebody who is not motivated by getting an iPod knows that other people in his or her group are and doesn’t want to let them down.” Since what motivates people is extremely individual, it’s a good idea to use a group reward. But as Hoffman does, mix it up a little—even iPods and restaurants can get boring if they become repetitive!
You can also use personality data to learn more about what motivates your team, though these are often more personal motivations. A 2013 University of Iowa study found that personality is actually more of a factor in motivation than any carrot or stick. For instance, it’ll be difficult to motivate a go-getting extrovert if she is stuck in a job with no advancement opportunities, and an introvert might not be excited by the possibility of a promotion to management level. A combination of individual motivations and group rewards might be the best way to go here.
Allow creativity in the office
This means different things depending on the individual employee’s personality. Some employees—who we call Inventors—are naturally drawn to traditionally creative careers, like writing, designing, or another art form. But really, at its base level, giving employees the freedom to be creative means empowering them to solve their own problems.
No job is too “mundane” for creativity—an executive consultant cites the example of a garbage collection company whose employees were encouraged to think of a way to improve on their route, and one employee came up with a solution that cut the time to drive the route in half.
Perhaps creativity means something as simple as letting employees decorate their workspace (to foster a positive environment where creativity can flow more freely). Maybe it’s having regular offsite brainstorming sessions, even if it’s just to a local restaurant or park. However you encourage creativity, remember that not everyone will feel freed by the ability to be creative; there are some personality types who just want to keep their heads down and produce quality work. So make sure you understand what motivates individuals on your team and that you’re giving people the option to express creativity, not a mandate. Cubicle decorating stops being fun when it becomes a contest.
Conduct “stay” interviews
So, if a third of employees have made up their minds about your company after the first week, that still leaves two thirds to go. You can win those over (or lose them). So, in addition to exit interviews, ask employees why they stay. Ask them why they came to work at the company in the first place, why they stay, and what their deal-breaker issues would be.
Use that information to inform your management strategies; maybe you’ll learn something valuable. Maybe one employee is the cause of 80% of reported personality conflicts—think about moving this person into another role--or another manager has a reputation around the office for smoothing over conflicts—give this person a raise!
Promote from within
Employees who see that the company values their talent and can see a future for themselves with the company are more likely to stay. Personality assessments can help here, too, by ensuring that a person promoted to manager has the right personality to lead—or receives extra training instead of being thrown into the deep end. Some people feel like they are more natural leaders than others, but that doesn’t mean those others can never be managers! It just means they may need more coaching or training before a promotion.
Conclusion
Excessive turnover costs your company a lot. It costs time and money to replace people—money and time that could be spent growing your business instead.
Following the steps to reduce turnover, including starting with the right fit, encouraging creativity, and offering rewards—financial or otherwise—not only reduces turnover but also creates a culture where employees feel valued and love to come to work every day.
10 Ways to Build Great Teams Using Personality Data
Introduction
Great teams are made up of great people. It sounds obvious, but think about it: You could put a team together simply by saying you want your smartest employees — judged by SAT scores or college GPAs or where they got their degree — but that doesn’t take into account the people behind those numbers. Research actually shows that the smartest teams aren’t just made up by lumping the biggest IQs together.
So, when putting together a team for a new project, you’ll want to consider the whole person: their strengths, weaknesses, preferred communication style — in a word, their personality.
A team should have a variety of personalities on it. Just like a great sports team, a great work team needs every member to play a different role, but all need to be aligned on common goals and challenges.
Here are 10 ways to build great teams using what you know of team members’ personalities.
Ask employees to take personality tests or self-assessments.
This gives everyone information that they might not already know about themselves — and will help them learn how to interact with their colleagues. Traitify’s Director of Psychology, Beverly Betz even suggests posting employees’ results publicly. “I would want every member of the team to know the [types] of every other member of the team,” she says. “This shows every team member’s strengths.”
“This isn’t like an IQ test where there’s a winner and a loser,” Betz explains. “There are strengths in every one of these types, and it can only benefit you to know yourself, and to know what your vulnerabilities are.”
Deliberately create variety.
“Newcomers to the team should be different in some critical way,” according to researcher Margaret A. Neale, “be it in an area of expertise, level of education, manner of thinking, or some similar dimension.”
In addition, a mixed group of personalities helps because teams have “life cycles.” In the beginning, a take-charge personality helps the group get aligned on goals. Later, employees with high EQ, or emotional intelligence, can help the group build consensus and learn how to best work with each other. Later still, can-do workers who are willing to roll up their sleeves will help the group stay on task and actually get their work done. Psychologist Bruce Tuckman calls these stages “Forming,” “Storming,” “Norming,” and “Performing.” (Tuckman later added a fifth stage, “Adjourning,” to recognize that not all teams need to exist indefinitely.) So making sure you have a mix of personality styles means that you’ve got someone who can handle all these stages.
Try unexpected pairings.
Sometimes similar personalities work really well together. “If you have two really creative people, they may bounce ideas off each other,” says Beverly Betz. “Or, they may move in different directions and distract each other.” It’s important to experiment, because sometimes people who seem like they wouldn’t be a good fit really are.
Betz says the Wright brothers are a good example of this. “They were really different people you didn’t think would work well together at all. One was really extroverted, the other was introverted. There was a lot of competition between them, but they worked really well together.”
Buddy up like with like.
When you have a newbie to the company or to a team, think about pairing that person up with a mentor with a matched personality for the short term. It may help that person learn the ropes faster if they have someone who’s “been there” before and understands where and how their personalities might mesh (or clash) with the existing teams.
That said, the research on whether similar personalities make for better mentor-mentee relationships over the long term is pretty murky, so after the newbie has finished her learning period, it might make sense to let her choose her own mentors.
Keep an eye out for dominant personalities and make sure they’re leading, not domineering.
According to Betz, “In the best teams, everyone has a chance to contribute.” This is backed up by decades of research in academia and in industry, including at Google, which has spent years studying team dynamics and has found that the most productive teams are ones where everyone gets to equally contribute to the work.
Trust — and interpersonal skills — are key.
Google’s research also found that the best teams cultivate an environment where team members feel that they won’t be ridiculed or shut down when they speak up. Betz agrees: In the best teams, “team members were respectful of each other and the group felt safe so that people could suggest ideas without fearing that they would be ridiculed.”
According to author Mario Moussa, who is also a Wharton Executive Education Fellow, “over half the time, people are not sharing what they are thinking and feeling,” and often it is because they don’t feel like they have “psychological safety.” But the more information you have, the better your team’s decisions will be.
Raise awareness with employees.
At a retreat or team-building event, you could team up employees with similar communication styles, and have them prepare a presentation for employees with a different style. This helps employees learn how to work with varied personalities.
Understand that “problematic” personalities can change if they have to.
“There’s a core part of personality that is stable over time. And that’s why for example infants have a certain personality at birth,” says Betz. “But I also think we can change personalities when we do something like therapy (or behavior modification). We can’t absolutely get rid of certain traits but we can certainly modify them so they don’t get in the way.” Again, one trait you may want to talk to your employees about is domineering.
Avoid pigeonholing.
Personality is complex. Introverts aren’t always shy, shrinking violets, and extroverts aren’t necessarily social butterflies. Some of the best salespeople are introverts, which goes against what we have been taught to think about introverted people. Personality can be a tool, but it should not be used to permanently typecast someone.
Don’t overlook how important personality is.
“I work with people on these issues every day,” Betz says. “If you’ve got one really problematic person in a team, it affects the entire team adversely. Sometimes there’s no way around it except to get rid of the person, or place that person in a different role.”
In other words, a team’s entire work product can be compromised by one problematic personality. A bad manager or team lead can affect everyone around them.
That said: If it’s not one person, but a personality conflict between two people, you can manage that.
Betz again: “I would get the two of them talking, and I would say to a planner, ‘What drives you crazy about the visionary?’ I would start a dialogue. I think you can use personality data to understand yourself, but also to understand others.”
In other words, a team’s entire work product can be compromised by one problematic personality. A bad manager or team lead can affect everyone around them.
In Sum
Building a group of all-star employees has always been a key to success, and a tricky one at that. If you don’t find people that mesh well together, you’ll see turnover, and a team that begins to unravel.
Engaging with personality data is a powerful tool that can give you insights into your own working style and that of your employees, coworkers and team members. While it’s not the be-all and end-all of creating a great team, it’s an important ingredient that can make a good team even better.
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