Some employees are not meant to be here 60 days from when they start, much less in 3 years. Of course HR professionals know the reality of this, but I want to give you some permission to be kind to yourself when it happens. I’m sure you’ve heard of the old 80/20 rule, that in any given situation, 20% of the people are responsible for 80% of the work. This is the reality of all organizations, even when everyone is being paid.
Second only to the challenge of recruiting, retention is a costly concern for businesses of all sizes. According to a 2016 survey, SHRM predicted the annual turnover rate to be close to 19% across all industries. That means on an average year, 81% of your staff is going to stay with you. The average cost-per-hire to fill a position is $4,129, while some studies show that replacing an entry-level position can cost up to 40% of an employee’s salary. Losing 19% of your staff per year can be costly, and even debilitating. The story of significant turnover can turn into a nightmare with implications that affect the ability of HR to recruit and hire qualified talent, it can damage a company’s culture, and it most certainly can lessen a company’s overall profitability. And this is just the tip of the iceberg.
But here’s a key point to consider: Some employees actually impact a company negatively just by remaining as an employee there. There are all sorts of reasons someone may not fit the team, and those reasons are not all necessarily personal or because the employee is a bad person. Many times, employees simply aren’t a fit for the company, the particular job, or the culture. And guess what? It’s okay to let these employees go, even when it costs your company time, money, and effort to find a qualified replacement. A negative impact employee hurts the culture. For example, maybe he doesn’t meet the responsibility of his job, but he’s a nice guy. Sure, no one wants to fire a nice guy, but if he is allowed to remain, but unable to meet the obligations of his job, that sends a signal to the rest of the staff that a special exception is being made for someone who isn’t carrying their weight.
The reality is that likely, 20% of your staff is performing the majority of your work. Let’s be honest, not everyone is a high performer, and to assume that 100% of your staff is, is well…not being honest with yourself. So you have to find the employees (whatever the percentage is) who are high performers, and taking care of business, and work to make sure they are the ones you are able to keep. That doesn’t mean that it’s open season on everyone else, but it does help you to sharpen your retention efforts to meet the needs of individuals, instead of a one-size-fits-all concept.
It takes work and intentionality to be able to provide this kind of retention thought pattern. It begins in the recruiting phase, and continues throughout the onboarding process and beyond. Understanding what your new hire wants in his or her career is critical so that you can help them move in the direction they want to go during their tenure with you. Providing measurable goals and KPIs, then giving feedback when those goals are met or not is critical in establishing a quantifiable, baseline performance metric. A system that provides recognition and reward helps you to provide needed acknowledgment to those who earn it. But what does all of this really do? All the systems, KPIs, feedback metrics, and performance indicators really help you to understand who your top performers are, so that you can work to retain THEM.
Once you really understand who is producing “what”, you can then begin to understand who you must keep, and who you can let go if need be. For some of you reading this, you’ll say, “of course.” But according to an Allied Workforce survey, many companies don’t measure employee retention and/or productivity. Did you know:
- Only 58 percent of companies provide clear job titles and identify expectations for employees?
- Only 39 percent of companies establish milestones and set goals for new employees?
- Ten percent of companies cite no onboarding and retention best practices at all?
So while this may seem like an “of course” thought, the numbers show that many companies lack the systems to accurately measure how an employee is performing so they can quantifiably see who they need to retain, and who they can legitimately let go.
Maybe it’s time for you and your team to go back to the retention drawing board, and find a way to keep your top performing employees, while being willing to let go of those who negatively impact your business. Sometimes an empty desk can be more profitable than the wrong person sitting at that desk.