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Behind Closed Doors

Margo McLay, Director of executive search and recruitment consultancy Executive People, reveals that it may come as a surprise to many executives, but workers aren't just leaving their jobs for the lure of more money.

Until a few years ago, most companies were boasting of their talented staff and increased productivity. Today, high staff turnover experienced by many companies is not only costing employers a great deal of money, downtime and inconvenience, but is seriously eroding employer brands and competitive edge.

According to Margo, whose business specialises in search and recruitment across government and private sectors from C-level to project managers and coordinators, no industry is immune to the skills shortage and the ‘revolving door’ phenomenon.

“While there has been much talk about finding the best people, I think there is a huge gap in how to keep them,” she says.

Replacing staff, she warns, could cost your company up to three times the employee’s salary -- which makes it unsurprising that market research has found that 80 percent of CEOs see employee retention as a strategic priority.

So perhaps the real question is: Why are your employees looking for new jobs in the first place?

Reasons Staff Really Leave

Margo is no stranger to the recruitment world, and is certainly the first person many of her candidates turn to when they feel dissatisfied with their jobs. Here are her insights from behind the interview room door…

1) The role was not what was expected. This is a primary reason for staff turnover so ensure the candidate is provided with a realistic job description up front.

2) Job doesn’t fit talents and interests. Despite the skills shortage, companies need to be careful not to hire in haste but look to a best fit scenario and match their talent to the organisation’s needs and culture.

3) Little or no feedback or coaching. Today’s employees, particularly the younger workers, want feedback. Provide honest and constructive feedback and often, says Margo, and you’ll get job commitment and earn respect.

4) No opportunity for career growth. Margo says many companies are shifting to online education to provide tailored, self-paced tools and training. Employers also need to realize that employees have an organisational “use by date” and strategies such as career coaching, and outplacement services are better to be engaged early to avoid performance management issues or disengaged employees in the work environment.

5) Feel devalued and unrecognized. Yes, there is a money issue, but the underlying reason is that many employees complain that no one ever said ‘thanks’ on the job or listened to what they had to say.

6) Feel overworked and stressed out. Too often there is insufficient respect in the organisation for the life/work balance of employees. Margo recommends fostering a “culture of giving” that meets employees’ total needs.

7) Lack of trust or confidence in leaders. Leaders have to understand that they’re there to support employees’ needs so organisations need to develop leaders who care about and nurture their workers, and then trust and confidence will follow.

Why Do Your Employees Leave?

According to Margo, “the reasons employees give for leaving may be basic and repairable, and a departing employee may provide suggestions for organisational improvement that might otherwise be overlooked by management.

“Employers shouldn’t get too overwhelmed by what candidates are telling me, but they can make a start on their retention programs by tackling the most common themes which encompass 1. people, 2. process, 3. place and 4. programs.

1. PEOPLE: Look to the immediate manager

"People leave managers, not companies," adds Margo.

“An employee's primary need has less to do with money, and more to do with how he or she is treated and how valued they feel. Much of this depends directly on the immediate manager.”

According to Margo, companies are struggling just to fill jobs and tend to appoint or promote technical people who may not necessarily have the requisite managerial training and experience behind them.

“Investing in practical management training and nurturing leadership qualities at all levels of the company is a good first step and sends the message to staff that you are committed to improving organisational dynamics and succession planning to make way for future opportunities.”

2. PROCESS: Exit and ‘stay’ interviews

The greatest value of exit interviews, Margo suggests, is found by consistently analysing group trends which can identify root causes.

“Organisations readily commit time and resources to the recruiting and interview process, yet little investment is made on interviewing departing employees,” Margo says.

“If you don't know why employees are leaving you can't do anything to address it, let alone devise any reasonable retention strategy.

And while Margo says that many businesses conduct exit interviews when staff resign, very few think to conduct a 'stay interview'.

“The main benefit of a stay interview is that you're able to identify issues and problems at an early stage, before they've reached crisis point and are causing high staff turnover," she adds.

3. PLACE: Toxic culture

The issue of ‘cultural fit’ shouldn’t be overlooked and is a foundational aspect, Margo says, of every candidate she interviews.

“It’s not that the grass is always greener on the other side of the fence; it’s the negative factors in their current workplaces – from poor management practices to bad workplace cultures – that eats away at employees; not just personality clashes” says Margo.

Margo believes the simplest tactics can completely transform a workplace culture from ‘command and control’ to one of ‘spirited collaboration and teamwork’:

  • Take your employees for coffee or lunch to catch up informally, air issues before they reach boiling point and use the time effectively for team bonding and to bounce ideas around the table
  • Respect that your employees have family lives outside of work, and provide a supportive environment that is family friendly
  • Provide information; no one can work effectively in a silo, but if they understand the organizational goals then they have something more tangible to contribute to and work towards. Shared goals create a sense of teamwork.
  • Recognise and reward your team members. Everyone loves praise and being recognised for a job well done both privately and publicly lifts morale which in turn can be good for productivity.

4. PROGRAMS: Employee care

“People want to be treated like people, and not company property,” says Margo.

Margo cites that about 5 percent of US companies, according to one survey, have hired personal assistance firms to handle at least some services for their workers - whether that means arranging for a car wash or searching for airfare deals, for example. The employer pays the concierge's fee, while staffers pay the cost of the wash or tickets.

“In Australia, some professional services firms are also trialing assistance service in the fight to keep talent. Examples include dedicated rooms for parents to care for their sick children, gym memberships, mental health days, overseas scholarships, staff gifts as well as bonuses, provision of emergency daycare, parenting courses, the introduction of online ordering, taxi vouchers and delivery facilities with local restaurants for employees who are required to work back late.

Perks like this cropped up during the high-tech heyday in the 1990s, when companies were competing for the same talent, but dwindled when that bubble burst. Now, these benefits are more commonly seen in multinationals and companies angling for the "employer-of-choice" label.

“In the infrastructure industry which has been traditionally low frill, we’re seeing group fitness programs and healthy lunches are becoming more common place. I think we’ll start seeing a lot more companies joining the employee care movement,” Margo predicts.

“Our unemployment rate is the lowest it has been for 30 years and that’s good news for Australia’s economy, but bad news for employers, who are struggling to recruit and retain staff from a shrinking pool”.

“While money is clearly a satisfier, it is not a core motivator on why employees leave. The best way to retain and motivate your workforce is not to try and do the ‘big bang’ approach. Solicit ideas and feedback up, down and sideways across the organization. Then choose initiatives which match well with your values and culture, and do them well”.

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