Could an Outsider Help You With Employee Retention?
Employee retention is a HUGE issue and is worth digging into.
Employee retention costs US employers nearly 1 trillion dollars according to The Work Institute. And each person you lose costs around 50% of their annual salary.
For example, if you have a healthcare operation with 100 employees, 30% turnover, and the average pay rate of employees is $50k, your turnover cost is approximately $750k per year. I worked in a business that had 50% turnover and 200 employees yet refused to deal with the problem quickly. Can you imagine the drain on the P&L statement? I can - they struggled and sold the business for pennies on the dollar after being forced to lay off managers, corporate staff, and long-term employees.
With such negative business impacts, anything that can reduce turnover in your business has a potentially strong ROI. But an internally driven retention initiative could be missing some important elements.
Here are some reasons why using a consultant or other third party could help you more effectively turn off the revolving door of staff turnover.
Trust
It is extremely common for employees to have a deep distrust of HR. I know this from the many many social media comments I’ve received about how employees view HR.
A retention initiative can involve a deep exploration of issues in your business. Unfortunately, employees may not fully trust the existing HR or leadership team enough to make this research project accurate and productive. If the internal HR team conducts this research, it could lead to skewed or missing data. Employees may not disclose the deep issues that are truly driving your employee turnover.
An outsider doesn’t arrive with this loaded perception and so they are in a better position to garner trust. It’s important for communication to be done in a way that supports and highlights the outside consultant’s neutrality. It’s important for senior management to communicate in a way that demonstrates a strong desire to understand the employee experience.
Objectivity
If you have an internal team (like HR) conduct a retention analysis and culture survey, there could be issues with objectivity. The HR team may have inherent assumptions or biases. Additionally, the leadership team may have their own assumptions about the causes of turnover. These biases can influence the process and outcomes of a culture assessment. Bias can also affect how the results are interpreted, so it requires a strong perspective to contradict those biases.
A consultant is able to approach and understand your culture and staff retention with no presumptions.
Power Dynamics
Many times, a workplace culture or team dynamic is influenced negatively by a senior leader or another person with power. This can make employees hesitant to speak up. It can also make an internal HR team reluctant to dig too deep. The partners of a healthcare business may even hold back from directly confronting one of their peers who is causing a cultural problem.
Because of their outsider status, a consultant is able to rise above these concerns. They can dive into and frankly share the outcome of their research in a way that helps the business move forward. They can handle the hard conversations easier because they don’t have the emotional charge that might exist for people within the business.
Capacity and Expertise
Your team may simply not have the capacity from a workload standpoint to be able to take on the huge project of understanding the deepest causes of turnover. They may also be lacking the professional expertise in compensation research or workplace psychology. Perhaps they lack the deep workplace experience to understand all of the things that drive staff turnover. They may lack the time that it takes to implement changes to your hiring, onboarding, compensation, and employee relations systems.
An HR consultant has spent decades studying psychology, dealing with employee conflicts, overseeing recruitment, and conducting staff surveys. They understand the drivers of turnover and the ways to influence those drivers to improve your results.
Conclusion
How much is turnover hurting your business? The research indicates that it is significant.
It often makes sense to act fast and work with an HR consultant who has the objectivity and experience to help you solve your turnover issues.
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