Rethinking Employee Turnover

The labor market is … well, a market. Workers sell their labor to employers for wages. Let us take a look at information from the U.S. Bureau of Labor and Statistics’ Job Openings and Labor Turnover report, which communicates national data. As of September 2021, there were officially 10.4 million job openings in the United States, but only about 7.5 million unemployed workers. There were about 6.5 million hires and about 6.2 million separations with the majority of those being “quits.” October’s preliminary numbers look like there are more openings and fewer workers available.

Interpreting this data can be difficult, but there is one glaring fact: It’s a workers’ market. Some want to say that right now, “people just don’t want to work,” but 6.5 million hires in September says otherwise. The labor market might be revealing, through competition, which employers have work environments that are more desirable — and which have environments that are less so.

Several years ago, I was working with Judith, a business leader who had unusually low turnover in a high-turnover industry with traditionally lower wages. Instead of a turnover rate in the 70% and higher range like the national average, Judith’s turnover rate, with a large team, was under 30%.

From working with Judith, I learned she took a specific approach with her employees that they appreciated and did not want to give up. They stuck around to work, specifically and especially, for her. She did not try to “keep” her employees; her goal was not to reduce turnover. She made it her goal to prepare her employees for their next job. For Judith, turnover was inevitable so she planned for it and made it a part of her employee journey.

This was Judith’s process:

1. Judith would talk about long-term goals during the hiring process. She wanted to hire people who knew what they wanted in their futures. Then, if she felt that the job she was offering could help them prepare for the future role they sought, she would keep them on her potential-hire list.

2. When Judith made her choice, she would have a planned conversation with her new hire. She would share that she selected them partially because she felt their long-term goals aligned with this “stepping-stone” job, and she wanted to help them move closer to their eventual destination. The conversation would sound something like:

“One of the reasons I hired you is because I feel like I can help you reach your goals. You said you wanted to be a nurse. This job requires patience, perseverance, eagerness to be a great teammate, and impeccable customer service skills. I want to help you become excellent at those things. In fact, I am making a commitment to you to help you become excellent. You mentioned you have a couple of years left in school. If you stay here through that time, I intend to write you a glowing recommendation when you quit. It would be my privilege to see you quit here to get your first nursing job.”

When I first heard Judith deliver one of these speeches to a new hire, it sent chills down my spine. I could tell that the new hire believed her 100% — and so did I.

3. During their employment with Judith, she would coach her employees for improvement in the context of preparing them for their next job. She would ask about their progress toward their next job. She would ask what else she could do to help them stay on track. For those struggling financially, Judith offered a small scholarship if they were taking classes to get a different job.

Not all of Judith’s employees were going to school (though many were). One person wanted to be a police officer but needed time to prepare for exams and physical tests; Judith was careful to never intrude on their workout and study schedule. One person was an artist and needed a job to make money while they built their reputation and relationships in the art industry; Judith hung their art in her business for customers to see and buy. Some of Judith’s employees simply loved their work; these were Judith’s right-hand team members and they were in it for the long haul.

Of course, taking care of your employees will keep them around, but it was Judith’s unusual approach in hiring people with the intention of having them quit after one or two years that made the biggest difference. She earned their loyalty quickly, they worked hard for her, and they rarely quit before the time that they were ready to move to that next job.

And…

4. When they ready to move to that next job, Judith wrote every one of them a spectacular letter of recommendation.