Employee Turnover, Relationships, and the Long Hard Look in the Mirror

by Dr. Aaron Halliday

Employee turnover is costly. Estimates indicate that the total costs associated with turnover can range from 90% to 200% of annual salary of the position and conservative estimates indicate that the regular minimum costs of turnover within some industries can be directly attributed to losses of more than 5% of their total operating budget. In addition to the direct costs of replacing the lost employee and training the new candidate there are losses in productivity, efficiency, knowledge, lost opportunities, and damage to client relationships and productivity via losses in morale and efficiency and through increases in work disruptions. There are also increases in subsequent turnover that tends to happen when people have collectively reached the same decision to abandon ship. Stress goes up, employee health and well-being goes down and rates of illness, absenteeism and presenteeism all spike in-turn. All of these effects impact the entirety of your staff, not just those heading for the door. The financial, physical and psychological costs are both shocking and far-reaching and it can bleed organizations dry. That's not all, people are choosing to leave their workplaces now in greater numbers than at any other time this millennium. But the way people approach relationships in the workplace is very similar to how they interact with many people that have dramatic impacts on their lives. There are striking similarities between failed romantic relationships and similarly disastrous employment relationships and there are lessons to be learned through this analogy.

When people voluntarily quit their jobs great chasms of skills, knowledge, operational gaps can form within workplaces that leave remaining staff overworked, stressed out, and more likely to quit themselves. Moreover, due to the chaos that ensues the likelihood of addressing any internal problems that had contributed to the recent departure are likely to go unnoticed until more than one casualty has taken place. Of course, there are steps organizations can take to gather some insight into these details. It isn’t uncommon for organizations experiencing waves of turnover to undergo serious reflection and critical self-examination and try to engage those leaving in exit interviews. However, we live an age where it is increasingly less common for people to give the courtesy of two weeks notice and increasingly more likely that these individuals will straight-up ghost your organization by choosing to simply not show up to work one day. These patterns are similarly reflected in the dating pool due to the technology of our time. By the time people have given up on relationships, whether they are romantic or professional, people are often exhausted and feel that there are fatal irresolvable problems with the communication and trust between all parties involved. So it’s easy to empathize with those asking why they should bother to provide you with their honest feedback on their way out if they don’t personally stand to benefit from it or believe that anyone is going to do doing anything with it after it's provided. Because of all these factors turnover can be a problem that often feels like a black box where you know the end result (the working relationship is over) but pinpointing the source of the problem can be challenging because of the diffuse network of people found commonly in a workplace. Which is precisely why, just as it is more effective (and cheaper in the long-run) to practice preventative maintenance in a relationship, it’s much more effective and cheaper to ensure that your organization is actively preventing itself from reaching staggering levels of turnover to begin with. If anything, it may be more important to pay attention as an employer because relationships are numerous, dynamic, and multifaceted. Otherwise, you risk hemorrhaging losses in clients, productivity, people, money, and other resources while spending time and resources diagnosing the turnover as an issue and retroactively trying to solve the cornucopia of problems that have likely stacked up to drive turnover so far out of hand that it drew your attention to begin with. Given the scope and severity of this problem, it’s important we use evidence to guide our decision and processes to ensure a healthy and productive work environment.

To clarify up-front, not everyone who leaves your organization should be considered a loss. Such functional-involuntary turnover occurs quite regularly and is okay. There are times where people aren’t a good fit for the culture, the role, the position, the team, or any of it. Slackers, thieves, and ne’er-do-wells do exist – although in far fewer numbers than many may assume – and it’s good to be done with these people as quickly and as efficiently as possible. You also shouldn’t sweat shedding the dead weight of those who you can’t trust to work autonomously and those who regularly fail to support others within your organization. These individuals are harmful, toxic, and costly. You want these people to go. You want to root them out if you can so you can protect the experiences of everyone else who is there for the right reasons. Performance ratings should include evaluations of critical factors like supporting others and autonomous functioning as a means of separating wheat from chaff. But you should also accept the responsibility of any role you played in hiring these individuals to begin with. Hiring these individuals was the mistake of a select few and the ramifications of these sorts of mistakes are often far-reaching and expensive. More importantly, these mistakes are often preventable and it is the responsibility of effective leaders and hiring staff to protect the investments made in every employee that truly wants to be aligned with you and your organization.

What I am discussing is dysfunctional-voluntary turnover. Dysfunctional turnover occurs when top performers leave an organization. Thankfully there’s plenty you can do to minimize this form of unwanted turnover. Although voluntary turnover can’t be entirely eliminated there’s plenty of great advice that Behavioural Scientists have to offer leaders looking to run a tighter ship and those who are already experiencing problems associated with dysfunctional-voluntary turnover. By understanding what motivates people to come to the table to begin with, what factors promote strong positive commitment to an organizations for long periods of time, and what drives people away you’re better empowered to retain your top talent saving you time, money, energy, and opportunity cost.

What motivates high-performing people to work with you?

People are motivated to work with certain companies for a wide range of reasons. People are motivated to work with certain companies for a wide range of reasons. Yes, people need to work in order to make money so that they can afford to live their lives. But research shows time and again that people don’t want to work somewhere just so they can earn a buck, they want to derive a sense of fulfillment, purpose, and meaning from their work as well. People have knowledge, skills, and abilities that make them a great fit for positions. But whether or not a company is looking to fill a position that fits the qualifications of the job-seeker and the compensation this position offers serve more as a minimum standard for people to pursue a job with a company. Any job can provide people with their market-average of salary and benefits. But, where it truly comes to factors that differentiate one job-offer from another in the attraction of high quality candidates (those that are more likely to have competing offers for employment), it usually comes down to factors like organizational culture and fit.

Research shows that organizational culture is one of the most important features that job seekers use in their evaluation of an organization’s attractiveness. Although, this information is readily available on most corporate websites and in many job postings it can be difficult for candidates to evaluate an organization’s corporate culture without experiencing it first-hand. So candidates view the materials they have access too and formulate their opinions on this basis along with anything they can cobble together from first-hand accounts and from websites like Linkedin and Glassdoor and form attitudes about organizations and then use these attitudes to make a decision whether or not to align themselves with an organization based on the value of the opportunity and the degree to which they believe their psychological contract with the organization will likely be fulfilled. The problem is, that companies often use statements of corporate culture and values as a marketing effort rather than what it should be: an objective, often hard, look in the mirror. Writing a values statement is easy, living them can be hard. Understanding what you truly are, regardless of what you want to be can be harder still. But it is absolutely critical for internal growth and long-term retention that you understand yourself as you are, where you want to be, and the path needed to get there... then, begin to walk-the-walk.

Culture is constructed by values and so all expressions of your values and culture should be in alignment with one another. Moreover, your policies should be in direct alignment with your values and culture as well. If there is incongruity between your values and your policies your people will pick up on it and these discrepancies can be sticking-points that drive frustration, dissatisfaction, and (rightful) critique of the leadership. For example, if an organization that explicitly lists trust among its values but its leadership fears letting people work from home because they may not do the work the people that work there will inevitably perceive the expressed value to be nothing more than empty words and false marketing. Moreover, if these values were what brought people into the organization in the first place, this will inevitably result in the degradation of trust that these people have with the leadership and the organization itself. Large gaps between what you say and what you do erodes trust. As with romantic relationships, the erosion of trust in working relationships also drives people toward the door. People grow tired of “all talk and no action”. They may feel lied too, and in a way they kind of were. There’s nothing wrong with your organization failing to retain people because they weren’t the right fit for the company. However, it’s unethical, irresponsible, and costly to your organization to mislead people into choosing your company under some false pretense. Too many recruiters and hiring managers are out their painting pictures of their corporate culture that look and sound as though they were directed by Billy McFarland and backed by Ja Rule. Give people an accurate reflection of what it is like to work with you and when they choose you over your competition they’ll be doing so because it’s the right fit for both of you. The people will appreciate and trust you more for your candour and the working relationships you form on this basis will last longer. If you believe that an objective and accurate reflection of what it’s like to work within your organization is so horrible that no one would ever possibly consider working for you, maybe you have some more of that objective, hard, looking in the mirror stuff to do and some changes to make. Truth be told, there are a lot of diverse people out there that are comfortable doing work that would absolutely disgust many others. But pose the hypothetical question to any sewage worker, crime scene cleaner, exterminator, or hazmat diver and they’ll tell you that under conditions where they feel they can’t trust their employer, they’d rather be unemployed or doing the same job for anyone else. This is why it’s so critical you align your values, your culture, and your policy and use accurate examples and expressions of this culture and value set to attract and lock in the right candidates. Draw the right people in under the right pretenses and you’re more likely to retain them in the long run. Trust is a funny and fickle thing, though, it takes a lot to build and very little to eat away at it. As the Texas lawmaker Sam Rayburn once said, “any jackass can kick down a barn but it takes a carpenter to build one."

What factors promote commitment of high-performers to an organization for long periods of time?

Scientists formally recognize three primary reasons that people have for committing to an organization: they have to, they ought too, or they want to be with the company they’re with. These three forms of commitment are termed continuance, normative, and affective commitment respectively. But there are two important things you need to know about employee commitment that are applicable to continued high-performance and turnover. First, affective commitment – commitment that stems from legitimately wanting to stay with their organization out of an often emotional connection with an organization – is the best of these three. People who feel high levels of affective commitment feel valued, act as ambassadors for their organization, and are generally great highly productive and supportive assets for the organizations that they’ve chosen to align themselves with. They also tend to stick with their organization longer. Second, those with high levels of either normative commitment (commitment stemming from people feeling they should stay at their organization usually for reasons of guilt or indebtedness to the company) or continuance commitment (commitment stemming from people feeling the need to remain with their organization for reasons like having a lack of available opportunities elsewhere) can and often do harm an organization’s operational functioning, social systems, and the bottom line. People who are obligated to continue working with an organization (whether out of reasons of need or guilt) can and do harm organizational operations, their productivity drags, they lack engagement, and like all relationships that have been strung on long past their time due to guilt or a lack of options, they’re likely to result in anger, resentment, and a bucket of problems when the relationship does finally come to its inevitable end.

The goal of every organization should be to maximize affective commitment and minimize the development of continuance and normative commitment. This is especially true for those with problems associated with turnover as low levels of affective commitment are predictive of both people toying with the idea of leaving and them actually leaving. But how do organizations and leaders go about maximizing people’s affections for their organization? Behavioural Scientists, Organizational Behaviourists, Managerial Scientists, and Practitioners have repeatedly shown there are a variety of ways you can go about doing this. The overwhelming majority of ways tend to focus on two central themes: (1) making the work and work environment as pleasant, supportive, engaging, and as meaningful to the employees as possible and by treating your people with high priority and respect. Investing resources in restructuring employee experiences and job characteristics so that they provide a great deal of autonomy, meaning, and variety while providing employees with an abundance of feedback and support will go a long way toward cultivating cultures of commitment. Unlike with many organizational variables (like performance and turnover and deviance) commitment is typically unable to be predicted by screening or selection assessments. Rather, commitment is a product of time, experiences, and the relationships people develop with the work, the organization itself and the people that comprise it.

All this being said, research has consistently shown that one of the most powerful things that an organization and the people that comprise it can do to drive the affective commitment is to support their people. This isn’t to minimize the critical role that proper screening and selection of candidates plays; if anything effective selection and screening become even more critical to ensuring the minimal viability of a candidate under this framework of operation so as to ensure they’re the right fit for the organization and role. When hiring is done properly, through evidence-based methods, the people you do happen to select will be much more likely to be high-performers and will be more likely to be retained. Support means giving your people what they need (physically, psychologically, emotionally, cognitively, and environmentally) to do their best. People will not continuously pour effort into a company that they feel doesn’t support them. Organizations that fail to provide training, feedback and development, autonomy or the proper raw resources to perform the job well; bosses that squash innovative efforts because it may rock the boat; and team-leaders that strive to steal the thunder of their teammates all have the same problem. They're all failing to support their people. As in a romantic relationship gone sour with years of neglect and a lack of support, this leaves everyone (but especially high-potentials and high-performers) feeling frustrated, and drained. Even under challenging circumstances high-performers so often want to drive the machine forward but are met with so much obstruction and resistance to change that they feel as though they have no other recourse to meet their frustrated needs but to disengage, detach, and look elsewhere. But by investing in your people, by giving them increasing latitude toward independence and autonomy in their work, and by treating people with respect and care they will want to continue working with you. Remember, being a leader is a role of servitude to your employees, not the other way around. When all of these forces collide, a mutually beneficial relationship will form and people will actually start giving it their all. In the simplest of market terms by providing a supportive work environment where people can thrive, you will look infinitely more attractive than all your competitors who are all still using an out-dated model of leveraging scrutiny and discipline to ensure work is done that's founded on fear and distrust and built by autocrats and bureaucrats. Because you are a much better option than your competition and because you've taken the time to select those that are the best fit for the position and the organization people will stick around longer and do better work: not only because they have to do it in order to continue working at the best employer of their available options, but because there are fewer barriers and obstructions in their way and the appropriate resources are available for them to do what they do best. This builds a relationship of reciprocation where everyone’s trying to help each other. It fills them with purpose, fulfillment, and joy and they wind up wanting to work with you longer. As Lee Iacocca once said “hire the best people and then get out of their way.” Employers shouldn't feel entitled to excellent work. First you have to earn potential high-performers, then you have to maintain things enough so that these people will want keep up the good work day after day, after day.

What Drives People Away?: Job Demands & Resources & Burnout

One of the most validated theories (remember a theory in science is tantamount to a fact of life - like the theory of gravity) in organizational behaviour is the jobs demands-resources model. It suggests that people do well when they have an abundance of resources and do poorly when their demands exceed their resources. When people work too hard they burn out. When people are fully capable in doing their work but are overburdened by red tape and poor management they are emotionally exhausted and they stop producing good work. These same people get sick more frequently, are injured more frequently and are more likely to mentally check-out while on the job. Unsurprisingly, they're also the most likely individuals to leave.

Just as there are many resources that go into the manufacture of a high-quality product, there are many resources that are required to maintain a high-performing workforce. Ironically, research has shown time and again that after a minimal financial compensation baseline standard is achieved the valuation and impact that money has on your employees is dramatically reduced. Yet many organizations assume that their people work harder if you could simply offer them more money. Although it is often a base requirement, people require more than a paycheque to produce their best work. They need the appropriate resources to meet their demands. This requires thinking about the demands people experience in a very human way. If you only made withdrawals from your bank account, it’s certain to eventually run dry. The same goes for your people. People have demands of support from the organization and its people (management, peers, and subordinates alike). People have psychological and emotional demands when soliciting or when frequently interacting with entitled and irate customers. People have cognitive demands when performing tasks that regularly fail or when engaging in boring, repetitive work for long periods of time. People also have external demands that are imposed on them both in- and out-side of the workplace as a result of the nature and design of their work. If your people are working so many hours that they don’t get to see their family very often this places external relational demands on your people (work-family conflict) that they would not experience otherwise. Although not entirely their responsibility organizations do have a salutary role to play when it comes to these external demands. Which is why it's incredibly important to know your people and the specific roles they perform so as to have a deep understanding of their needs. This is why research consistently shows that employee's personalities are much better predictors of their engagement than their salaries. For people to be willing and able to offer their best there must be sufficient resources provided to these people to exceed the culmination of all these demands that people have as a result of their working with your organization. In order to meet the demands of individuals you have to have a keen insight into them as a person and the nature of the roles that each of these people are carrying out. Otherwise, they will likely tire and leave. Work systems should be win-win arrangements where employers and all stakeholders reap the benefits of the working arrangement rather than relationships of exploitation of labour. When relationships become one-sided things fall apart.

A thoughtless approach many organizations take with regards to their people would never in a million years be applied to any other critical aspect of a business. Those that do routinely take a laissez-faire approach to decision making often miss the mark by a long-shot and wind up paying dividends for it in the end. People are a critical component of any business and they require the same time, attention, thought, and resources as your customers, sales, your equipment, your shareholders, and even your product. Giving your people the consideration and resources they require reduces stress and counteracts the effects of high job demands. It’s proactive and provides a competitive advantage relative to those that don’t; failing to do so is costly, reckless, and unethical.

When people sign-on to work with you, there are two contracts people are signing: one is the literal contract that outlines the job description, the position to be filled, their pay and other legal details surrounding their employment; the other is an unspoken psychological contract made between the person and their boss and the hiring organization that’s outlining a reciprocal personal and societal expectation that those embarking together, in a working relationship, will respect each other and act fairly. When this latter contract is violated, people take note and it’s detrimental to their trust, their day-to-day performance, the support they give others at work, their commitment to the organization, and all of this result in people moving one step closer to the door.

If you don’t believe me or the science, fine. May the deluges of talented people fleeing your misguided efforts inundate better workplaces where they’re treated like the human beings that they are. People have needs. They need to be met in order for them to function and perform at a high level. We live in a society where people have never been more educated, highly-skilled and cross-occupationally trained and deserving of autonomy yet, in spite of all this, some employers will always assume global incompetence or that their employees are just a bunch of slackers out to cheat them or do them harm. These managers are preoccupied with micromanaging and fire-fighting rather than with proactively cultivating positive workplaces that are capable of putting out and actively preventing fires automatically. Smart people build processes and automated systems that control chaos when it arises. This is where these individuals will struggle. Leaders comfortable with exploiting others will default to the assumption that everyone is, similarly, out to exploit them as well. There will always be those who refuse to empower and relinquish control to those beneath them - even if there’s clear evidence that it’s likely to be more profitable otherwise. But if you’ve read this far, I’m betting a small part of you knows that I’m right - even if you aren’t willing or able to make the changes required to improve your turnover woes. To the non-believer, I do have one other point to caution you on... The thing about many people who have left absolutely toxic relationships of distrust and usury (whether they be romantic or working relationships) is that when the relationships end, people often have an axe to grind. They’re not going to sing your praise to anyone or be likely to buy your products or services after being burned. In all likelihood, they may occasionally be inclined to do the latter (word of mouth advertising is a two-way street). Moreover, if they’re ever in the position to compete against you in the future, they’re going to relish the idea of going toe-to-toe with you and taking you to the cleaners. Individually, that may not sound all that threatening, but as you continue to burn through ranks of employees every year this is likely to turn around and bite you over time.

What to do when a high-performer wants to leave?

When high-performing people do leave it’s a disappointment. It may come out of the blue or you may have seen it coming from miles away. But, sadly, there’s usually quite little you can do to improve the working relationship once they have came to you confessing their readiness to move on to greener pastures. By the time they’ve communicated to you that they’re quitting, they’ve thought it through thoroughly, considered their options in-depth, and are possibly pursuing another working relationship with others. It’s like a sad, one-sided break-up. The damage to the relationship is likely to have already been done. Regardless, you should earnestly try to understand what motivated them to leave and try to correct the problem. At this point, you’re trying to do damage control through informed diagnosis and swift, targeted, corrective action. If one person is experiencing a problem, it’s likely others similar to them are experiencing it or similar problems as well. The best time to resolve a problem is before it has begun (through prevention), the second best time is today. At this point, it’s time to take a deep breath and take a good long-hard look in the mirror to understand the imperfections of the company and what you can do to improve it. This exercise is hard but also very fulfilling if you can improve the lives of your coworkers. If you can, provided it isn’t likely to leave your company vulnerable to too much exposure, keep these individuals informed and updated about what you did to correct the problem. Tell them how this has impacted your work environment and thank them for their role in facilitating this change. People can and do return to workplaces they’ve left when they’ve had fantastic employee experiences.

The Long and Short of It

Dysfunctional-voluntary turnover will always be a problem, but when it happens in high volume you are likely experiencing the symptoms of a much larger problem that can bleed your organization dry. One of the primary factors that influences why people commit to an organization and are engaged in their work is due to their affective commitment. So ensure your people want to be aligned with you and your organization by providing a workplace where everyone’s needs are met and where people are supported by one another. Ensure that your people are provided with enough resources to exceed the comprehensive culmination of demands that their work places upon them. Take the time and resources to effectively hire talented people that can perform autonomously. Trust these people to produce good work when provided with the right resources and support and inspire these individuals however you can. If individuals don’t thrive in this environment maybe they’re not a good fit for you and your organization and perhaps they would be better off doing something else for somebody else. Which likely signals these individuals would be best categorized as functional rather than dysfunctional turnover. When good people go, though, take the time to listen to them and to use this to engage in corrective action. Even though there’s reason to question the contents of exit interviews your priority should be to ensure this event is an isolated one rather than being due to a systemic problem in the organization. If you’ve done a good job in providing these high-performers about to leave with the support and resources to do their job then, hopefully, this will promote the likelihood of a more honest conversation at the time of their exit. Use this information to solve existing problems in a quicker, more efficient way. By listening and regularly checking in on your people, and with the proper diagnosis of the problems you’re experiencing effective, targeted remedial action can occur and you should be on your way to correcting your turnover woes.