I started my career at Bain & Company, a global management consulting firm charged with helping some of the world's largest organizations solve their most critical business challenges.
A central part of the job was showing up at a client's headquarters with often just a few weeks to not just diagnose an (often very complex) problem, but come up with a solution as well.
This was driven by the fact that not only were the problems being solved often urgent, but Bain's expensive monthly rates meant their solving was even more urgent, at least for those controlling the checkbook.
There were two basic but recurring insights I picked up on doing this again and again for clients over several years:
For example, if we were trying to help a client with declining sales, aggregate sales numbers never told you what was happening so we'd cut the data by region and by product. This led to a few different possible scenarios:
The point? It wasn't till we looked at the data and cut that data in the appropriate way that we had a playbook for how to go about diagnosing and solving the problem in question.
SO WHAT DOES THIS HAVE TO DO WITH TURNOVER?
When we talk about the problem of reducing turnover, the same rules I learned at Bain apply:
Most people get this at the high level. After all, you can't even know you have a turnover problem without data since it takes data to calculate what your turnover is to begin with.
Similarly, companies rarely talk about turnover at the aggregate (company-wide) level. You have to break turnover out by position to even know where the problem is serious (#2). Unfortunately, this is where companies far too often stop.
So where should you go next? Cut the data before you diagnose.
My first recommendation is to look at how turnover varies across each employee:
Of course, you can have multiple sub-problems going on at once, but the point is data can help you identify where to focus most in order to have the largest impact in your turnover reduction efforts.
YOUR MOST EXPENSIVE TURNOVER IS ALMOST ALWAYS DUE TO HIRING MISTAKES
It's important to note that not all employee turnover is created equal. What I mean by that is that for a fixed position (e.g., customer support rep, etc.), it's the employees that turnover in the first few months that are costing you the most check out our Cost of Turnover Calculator.
Why? Because you basically just spent an enormous amount of money to find a candidate, screen that candidate, onboard/train that candidate, only for him/her to leave before they generate any meaningful ROI for the company. And as one last gift, you now have to go spend more money to find a new candidate (only for the process to repeat itself).
IMPROVING HIRING IS CRUCIAL WHEN REDUCING TURNOVER
It's true, people leave jobs for a variety of reasons, but if you have employees leaving jobs just a few months (if not weeks) in, there was probably something you missed when hiring them in the first place.
For example, either you missed a key trait(s) they have or didn't have or you didn't correctly explain what the job was going to be like in the first place. Both could represent potential opportunities for improvement in your hiring process.
Because of that, if you want to get rid of your most expensive turnover first, take a look at how you're screening candidates. That's usually the best place to start.
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