Everyone knows the phrase, "money makes the world go 'round". I would challenge that money and retention are interchangeable.
Retention makes the business world go 'round.
Think about it. Retention is a large contributing factor as to whether a company sinks or floats. However, the majority of the focus is external on the customer retention. It is much cheaper to keep an existing customer than have to find new ones, or hope that they find you. Marketing campaigns all revolve around retention... point systems to encourage customers to become frequent shoppers to get rewards and deals, discounts offered at the bottom of receipts to bring them back, emails taken at point of purchase to bring them back later, etc.
Do we focus on employee retention with the same rigor? Employee retention is the same way in the sense that it is much cheaper and more beneficial to slow employee turnover.
No client retention = no revenue.
No employee retention = no company.
Looking at it from a pure monetary standpoint- employee retention helps your bottom line. With a new employee, there are upfront costs such as a background check, drug test, time of your other employees for the interview process, (possibly applicable) downtime when a position is empty in between employees, administrative costs, training materials, and time to train before they can take on all the responsibilities of the job description. With frequent and consistent turnover, these costs for new employees can really start to add up.
Voluntary employee turnover in the US is causing a $1 trillion loss to businesses yearly (Small Business Trends).
$1,000,000,000,000.....that's twelve zeros.
In 2018 "American workers who quit their jobs topped 40 million – representing 26.9% of the work force" (Bureau of Labor Statistics). Some data from iHire verifies that over 50% of professionals have left a position voluntarily in the last five years and about 35% those who have left, have admitted to job searching while on the clock.
Below, we have inserted a pie chart to give a visual representation of the data pulled from a survey conducted by iHire. The survey was done to investigate the reasons as to why professionals are leaving their positions.
Something interesting throughout the research and writing of this article is that, psychologically, we know that humans desire interaction and a level of belonging in relationships. We seek community. But this isn't just in a personal life, what we are seeing, is that professionals are leaving because they don't feel like they belong. Their work environment is lacking connection and work satisfaction.
Employees seek to feel:
In times of difficulty, does the company culture lead to a feeling that everyone is in it for themselves? Is it a cut throat environment?
In this video, "Why Good Leaders Make You Feel Safe", Simon Sinek talks about why we seek safety. What safety looks like, how it affects employees and then gives a powerful example of a company who was hit very hard by the crash of 2008 and how the company took that opportunity to build a culture of unity.
Valued & Heard
One of the most important things for us to feel is that our work matters, that we contribute and are relied on. When we can see how our work played a part in the accomplishment of a task, it leads to job satisfaction. This goes along with being heard- input and suggestions that lead to change will make an employee more invested in their work environment. (Part of feeling valued also comes from seeing that your company values your skill and contributions and shows you that through your salary. Pay raises over time and bonuses say a lot.)
The biggest part with helping employees and coworkers to feel valued and heard, is to express your gratitude or acknowledge their efforts. "When we interact with people who make us feel valued and cared for, we feel good about ourselves and are inspired to work harder, longer, and more creatively" (HelpGuide).
When or how should this be expressed? This is where creating moments comes into play. The ideas of creating moments come from a book called, "The Power of Moments" by Chip & Dan Heath. In this book, they examine numerous ways and settings in which moments are powerful. For business sake, these concepts are being applied to how it can affect a company.
Authors Chip and Dan Heath argue that the first day is an opportunity that is HIGHLY under utilized. First days are normally filled with paperwork, a short office tour, maybe the handing out of a uniform, feeling like everyone just knows you as 'the new person' and wondering where you'll fit in, maybe a meeting or two and the start of training. What if your first day experience was nothing like that? In the book they illustrate how John Deer's first day experience created a true moment where employee left work knowing they were apart of a team and how they fit in. Watch this short clip of Chip Heath further explaining this idea.
Periodic reassurance is what keeps every relationship alive. Relationships that start strong but then plateau, fade out and usually end. If you don't feel valued in the relationship anymore, why stay? If you don't feel valued at work, why stay?
In the book "The Power of Moments", they cite a study by Berkeley Professor Morten Hansen who explored how purpose or passion would correlate to job performance. Purpose is knowing that your work contributes while passion is having excitement for your work. It shows a 4 block quadrant and how employees fit themselves with high and low purpose jobs and high or low passion.
|High Purpose||Low Purpose|
|High Passion||80th Percentile||20th Percentile|
|Low Passion||64th Percentile||10th Percentile|
This study shows that purpose trumps passion. Make sure that your employee see their PURPOSE. Take time to help them see their purpose. Create moments. Defining or memorable moments will fit into one of these four categories:
- Elevation - "Defining moments rise above the everyday"
- Insight - "Defining moments rewire our understanding of ourselves of the world"
- Pride - "Defining moments capture us at our best - moments of achievement, moments of courage"
- Connection - "defining moments are social: weddings, graduations, baptism, vacations, work triumphs, speeches, sporting events"
Leadership needs to initiate and intentionally create these moments. This article has focused on an emotional aspect of the work but don't underestimate the importance of the physical environment. The spaces we work in can promote the mindset your work needs. Walk into a space, can you imagine yourself being there for years? Can you imagine success there? Next weeks article will go further into the importance and psychology behind the spaces we are in, and how special event spaces can elevate the moment.
One could make an argument that by focusing on employee retention, your company moral and service will improve and in turn, lead to further customer retention. Employee retention leads to less turn over, and in theory, your top to bottom leadership and pushes can stay. You don't have to keep training and helping them see the vision, because they know it. Showing employees that their work really does matter, makes them part of the vision and they in-turn are invested and seek to help to accomplish it.