how to manage employee turnover
TRANSCRIPT
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HOW TO MANAGEEMPLOYEE TURNOVER
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Rusty LindquistV P S T R A T E G I C H R I N S I G H T S
B A M B O O H R
@ r u s t y l i n d q u i s t
r u s t y @ b a m b o o h r . c o m
w w w. l i n k e d i n . c o m / i n / r u s t y l i n d q u i s t
Mykkah HernerM O D E R N C O M P E V A N G E L I S T
P A Y S C A L E
@ m y k k a h _ h e r n e r
M y k k a h H @ p a y s c a l e . c o m
w w w. l i n k e d i n . c o m / i n / m y k k a h h e r n e r
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"HR today sits smack-dab in the middle of the most compelling competitive battleground in business, where companies deploy and fight over that most valuable of resources—workforce talent."
-Matthew D. BreitfelderHBR: “Why did we ever go into HR”
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A Changed Perspective
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Millennials will comprise 75% of the global workforce by 2025. - Deloitte
Millennials
91% of Millennials expect to stay with your company fewer than three years. – Future Workplace
v75%
v91%
Average tenure for Millennials is 2 years (5 years for Gen X and Gen Y)– Payscale
v2yrs
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43%
1yr
90-200%
Within the next 10 years, 43% of the US workforce will be eligible for retirement- Forbes
Baby Boomers
Among the jobs that 39-44 year olds began, one third ended in less than a year– Forbes
Cost of replacing an employee is between 90-200% of their annual salary.– SHRM
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83%
23m
52%
83% Of executives say they’re increasing contingent workers.- Oxford Economics
Contingent Workers
There’s projected to be 23 million contingent workers by 2017 (up 26% in 2 years)– MBO Partners
52% of Millennials expect to work independently (82% in emerging markets).– Deloitte
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• Workforce competency and skills gap
• Increased competition
• Globalization
• Culture
• Competition for talent
• Stresses on work-life balance
• Etc.
Additional Dynamics
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–Bersin by Deloitte
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–Ram Charan Best-selling Author, World-renowned Business Advisor
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Organizational Power
Organizational power goes to the group that deals with the biggest problems
Alfred Marshalleconomist
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Defining and Quantifying Turnover
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The rate at which people leave a place, company, etc., and are replaced by others
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Adding Good Complexity
Good Turnover vs. Bad Turnover
Low performer High Performer
Voluntary X% Y%
Involuntary P% Q%
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Retention is still a Major Concern
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Turnover costs more than just dollars
• Morale• Engagement• Performance• Training• Knowledge retention• Nimble to market changes• Cost to replace
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Common Myths of Employee Turnover
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Myth: Turnover is Always bad
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Myth: Turnover is Bad for Morale
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Myth: We can predict turnover based on generation
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Myth: Turnover is always time-consuming and costly
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Employee Retention
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BusinessValue
H
L
Strategic
Operational
Micro Small Mid Large
HR viewed as a cost centerTransactional HR High-Impact HR
HR as a strategic investment
Evolution of HR
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BusinessValue
H
L
Strategic
Operational
Micro Small Mid Large
Evolution of HR
HR viewed as a cost centerTransactional HR High-Impact HR
HR as a strategic investment
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Basic Operations
Strategic Operations
HR HIERARCHYOF NEEDS
(Culture, Performance, Engagement, Satisfaction, Employment Brand, AdvisingTalent Management, SuccessionPlanning, Learning & Development…)
GeneralOperations
Business Value
(Operational Efficiency: HRIS, Records, Talent Acquisition, Compliance Tracking, Etc.)
(Payroll, Benefits, Time &Attendance, etc.)
©
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Understand your true worthas a strategic necessity
Eliminate the unnecessaryshed all the dead weight
Organize your informationto lay a foundation for insight
Automate the operationalset yourself free to do great work
Maximize business valuealign activities to strategic outcomes
Solve meaningful problemslearn to think, act, and win like a business.
Measure and reportthe value and impact of your work
ESCAPE ELEVATE
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Aon Hewitt
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Engagement goes beyond satisfaction. Engagement occurs when we find meaning, autonomy, growth, impact, and connection--MAGIC--in what we do.
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• Purpose Alignment• Culture Alignment• Personal / Professional Development
• Learning and growing• Clear career path
• Loyalty• Leadership• Team / Peers• Customers• Work
• Investment / Ownership (skin in the game)• Effort• Time• Equity
• Feel Valued• Compensation• Reward & Recognition
• Sense of winning• Keeping Score• Common Enemy
• Sense of Belonging• Tribes• Friends / Personal Connections• Sense of pride• Community
Common Engagement Elements
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Setting up your comp plan for success
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Comp as a Keystone
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Components of Comp
http://businessmodelalchemist.com/blog/2011/11/make-your-business-model-clear-with-vivid-thinking-guest-post-by-dan-roam.html
Solid Base Pay Plan
Clear Strategy
Incentive Plan
Competitive Market Pay
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What compensationmix is right for your org?
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Compensation Strategy
Talent Market(s)
Industry, Size, Location
Level of competitiveness
How aggressively to
pay
What to reward
Performance, Experience, etc
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What about variable pay?
Less than 100 Em-
ployees
100 - 1,000 Employees
More than 1,000 Em-
ployeesRetention bonuses
Hiring bonuses
Individual incentive bonuses
Team incentive bonuses
Spot bonuses or other discre-tionary bonus programs
Most give bonuses: 81% of top performing companies74% of all companies
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Recruitment & Retention Plans
54.6%
18.3%
35.3%
13.3%
58.2%
28.1%
59.7%
21.3%
38.8%
14.0%
63.4%
32.2%
Plans to recruit and retain high-performing employeesAll Top Performer
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Immediate ActionsCalculate turnover rate
Identify good and bad turnover
Brainstorm retention efforts that work
Evaluate your comp plan – does it align with org objectives for retention?
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bamboohr.com/blog | payscale.com
Thank you!
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Rusty LindquistV P S T R A T E G I C H R I N S I G H T S
B A M B O O H R
@ r u s t y l i n d q u i s t
r u s t y @ b a m b o o h r . c o m
w w w. l i n k e d i n . c o m / i n / r u s t y l i n d q u i s t
Mykkah HernerM O D E R N C O M P E V A N G E L I S T
P A Y S C A L E
@ m y k k a h _ h e r n e r
M y k k a h H @ p a y s c a l e . c o m
w w w. l i n k e d i n . c o m / i n / m y k k a h h e r n e r