I predict that 2016 will be the year your firms’ disengaged employees say, ‘enough’! Your employees hung in during this recessionary dip (which took root in 2009), but after 6 years surviving countless organizational layoffs, job eliminations, mergers, reductions in training and development investments, and few promotions and pay increases, employees will again be in the drivers seat.
Why should you care? Employee turnover is expensive. Many studies show that the total cost of losing an employee can range from tens of thousands of dollars to 1.5 – 2 times the annual salary.
Consider the real “cost” of losing an employee:
- Cost of hiring and onboarding a new person (advertising, interviewing, screening, hiring)
- Lost productivity until the employee is trained
- Lost engagement and therefore a loss of discretionary effort
- Project management along with client service issues as new employees have a longer learning curve
- Pied Piper effect – whenever someone leaves other take time to ask “why?”, and “should I be looking?”
Author and researcher Wayne Cascio (Investing in People) says that the residual effect caused from rounds of layoffs where the ‘surviving’ employees can take years to recover their pre-layoff levels of commitment and engagement.
Now that we’re seeing an economic recovery, your employees are beginning to gain confidence in the job market. Are they beginning to look for a new job?
2016 will be the year that your now “disengaged” employees start quitting. Why? They have renewed confidence in the job market with fewer concerns about being another employer’s ‘last in’. Dealing with spikes in turnover will be exasperated by the fact that many firms are growing and need to hire even more talent. Growth means adding to head count but in reality, organizations will be adding AND replacing departing employees.
I don’t think I’m being an alarmist. In fact, Gallup’s 2015: State of the American Workplace Report concludes that only 32.5% of the workforce is engaged. The scariness of this statistic is amplified in our “Who’s Sinking Your Boat” viral YouTube video. This video metaphorically describes the state of employee engagement by asking us to imagine we are part of a crew team. As you look behind you, you discover that only you and two of your crew mates are rowing their butts off, while 5 of your fellow rowers are casually looking at the scenery, and remarkably, two are attempting to sink your boat by bringing water onboard. Can your crew team win the race? Of course not. But according to the Gallup study, that is precisely what is happening in the workforce.
I anticipate significant job movement as we head into the new year. Your retention and engagement investments (and goals to become “The Employer of Choice”) should not be analogous to a light switch – you shouldn’t just turn them on or off. You need to have a strategy in place that can sustain the good times , and the “not so good times”. Think of your engagement investments and efforts as a dimmer switch – during financially challenging times, you lower slightly, and during boom times, you elevate slightly, while continuously communicating with your employees the realities of your business challenges and successes.
Companies need to focus on their engagement and retention strategies today to be prepared for tomorrow. These strategies need to focus on the following essentials engagement basic practices:
- Create a line of sight describing where the company is going, how you’re going to get there, and what role all of your employees play in helping you get there.
- Train your first line leaders on creating an engaged culture wither their employees. Why? Because the number one driver of employee engagement is one’s relationship with their boss.
- Create a robust communication culture built on transparency, honesty, and consistency.
- Drive high performance because A players want to work with A players.
- Foster a culture of celebration and recognition.
- Doing well by doing good. Identify both the ‘what’ it is you do (what you sell), along with your ‘why’ (your purpose or mission). This will enable you to crystalize your purpose, which will allow you to win in the marketplace. In fact, according to research by Jim Collins (Good to Great), firms that focus on purpose outperform their peer group by 6 times!
– Bob Kelleher, Chief Engagement Officer, @BobKelleher
