When considering how to approach turnover, I have this bit of advice: Control the aspects of turnover that you can, and manage the effects of the circumstances that you can’t change.

Sometimes managers are so focused on reducing turnover that they never consider the possibility that some turnover is outside their control. The turnover might be too costly to control, or perhaps the reasons employees leave are outside their control. I like to term this uncontrollable turnover as “fact of life” turnover.

Ask two questions to assess “fact of life” turnover:
1. Can I control the reasons people are leaving?
2. How much am I going to have to spend to control turnover?

Controlling the reasons people are leaving
Can you control the reasons people are leaving? Be careful here. Some “uncontrollable reasons” may in fact be “controllable.” Let’s say an employee is leaving because of a change in his or her family situation (e.g., new baby). While some organizations consider this reason uncontrollable, other companies build incentives to return (e.g., flexible hours, return bonus, day care, etc.). If the reason is truly uncontrollable, then it is important to begin to manage the negative consequences of turnover. However, if the reason is controllable then you can design a cost-effective plan to correct it.

Spending to control turnover
Is the cost to control the turnover worth it? Calculate the cost to lose an employee. Then, calculate the cost of the strategy to retain him or her. If the cost to lose the employee(s) is less then the cost to retain them, then it may not be worth investing in that particular retention strategy. If this is the case, then management of the consequences of turnover is imperative.

Therefore, if you have “fact of life” turnover, don’t ignore it. Look at it as an opportunity to proactively manage its potential negative consequences. In future blogs, I’ll talk more about measuring the costs and managing the consequences of turnover.

Do you believe that employee retention rates should always increase? I don’t necessarily believe that they should. At times, turnover is OK.

Voluntary turnover can be a blessing when a company is downsizing, when seasonal work has ended, or when a new corporate strategy is being pursued. If a company is overstaffed, voluntary turnover can be encouraged, for example, through incentives.

Voluntary turnover helps eliminate the disruption caused by layoffs or terminations. In a slow economic time, companies may want more rather than less voluntary turnover.

Voluntary turnover of poor performers indicates that leadership is doing its job and that human resource practices are effective. This poor performer turnover is mutually beneficial. These employees improve their self esteem and job satisfaction when they find a job with a better skill match. And, as a result of the poor performers moving on, the organization becomes more effective.

When is voluntary turnover desirable? If you aren’t categorizing the reasons for turnover, then you may be wasting valuable resources trying to reverse what should be celebrated!

I remember visiting a company a few years ago. The management team proudly proclaimed their turnover rate in the call center was close to zero. Now, when I hear something like that my ears perk up. Coming from an industry that has notoriously high turnover I start wondering, “How’d they do that?”

The next day I entered this company’s parking lot. As usual there were special parking spaces reserved for tenured employees. But there weren’t just a few spaces; the reserved spaces went on for three parking structure levels. Whew! Not only did this company essentially eliminate call center turnover, it also had an alarming number of seasoned employees. The average tenure with the company was 15 years. I had to get to the bottom of this miracle.

After digging, I found a logical reason—one that should not be duplicated elsewhere. The call center was the “dumping” ground for all the other departments in the company. If someone didn’t work out in sales, he or she was sent to the call center. Not good at your warehouse job? Well, there is a place for you in the call center. The company was holding fast to an “old employment deal.” It stated, “If you are loyal to us, we will be loyal to you and provide life-long employment.” Rarely was anyone terminated due to lack of performance. Employees were simply retired to the call center. This led to a new employee classification that one of my associates aptly named, “Retired without leaving.”

This may seem like an extreme case, but don’t dismiss it all together. Do you receive requests from other departments to “take” a human resource that just isn’t cutting it somewhere else? When was the last time you terminated someone for poor job performance (and not just attendance issues but poor quality and / or productivity performance)? While you may have high turnover, you can be glad it isn’t zero.

We often say that we want to “hold on to” or “keep” our good people. However, the phrases themselves may belie the truth about what we really think of our employees. “Holding on” is a picture of restraining physically and barricading the exits, and “keeping” is similarly negative. I believe these phrases illustrate our jaded “inside out” perspective about employee retention. Maybe we can begin using employee friendly terms to describe our desire for a continued business relationship with our employees?

This “inside out” approach hasn’t worked with customers, so why do we think it will work with employees? Aren’t employees our valued customers after all? In an attempt to improve customer retention, companies are migrating from an “inside out” to an “outside in” orientation. I’m betting we can improve employee retention by applying the lessons learned during this migration.

When companies start in an “inside out” mode, they develop their processes, policies, and procedures by defining what is best based on the company’s perspective of things. In this mode, the company talks about “holding on to” or “keeping customers.” Recent customer retention research has demonstrated that this “inside out” strategy is detrimental to the bottom line.

Companies are learning how to flip their thinking so they start designing strategies around the customer’s perspective. This “outside in” approach enhances customer satisfaction and retention. Once embraced, this approach helps companies create environments in which customers want to stay. Companies no longer “hold on to” or “keep customers.” Instead they build a partnership based on insight and trust.

In the same way we can enhance employee retention by looking through their eyes. By focusing “outside in,” we can stop “holding on to” employees and start creating environments in which employees want to stay and grow.

Recently, I was working with a company to build a performance management infrastructure for its call center agents. As we were designing the metrics, one of the team members mentioned that there is some “big brother” concern from the agents whenever management talks about “schedule adherence” or “agent utilization.” The employees can become fearful when they believe they are always being watched by an unseen force.

The recognition of employee concern led us to a discussion about how the names of metrics typically aren’t employee-centric. We communicate measures to the employees using attributes that are important from the company point of view, but not necessarily from the employee’s point of view. If I am an agent, hearing the term “agent utilization” may make me feel “used.” The names of measures should help agents understand how they are contributing to corporate objectives.

In the meeting, we discussed whether “a rose by any other name” would be less offensive. Our conclusion was that re-naming might seem like wrapping paper that only disguises the reality. However, agents will begin to understand the difference if the company’s motivation and message is clear and managers give the employees time to adjust.

So how could you better name a metric that is currently called “schedule adherence” or “calls per hour?” Because your organizations are unique, the answer is different for each of you. However, you can ask specific discovery questions. For example, how does a metric align to corporate objectives? How do you frame the metric from the employee’s point of view? Does “calls per hour” become “customers per hour?” Does “schedule adherence” become “attention to schedule?” Only you, with the help of your employees, can define those nuances.

Who is a valuable employee?

A valuable employee is one who can contribute to the goals of the organization and is a good fit for the job.

Most managers will tell you they don’t have trouble identifying a valuable employee. However, most managers incorrectly define “valuable.” They look only at the employee’s productivity, willingness to do whatever is asked, and potential for promotion. Managers may cast aside valuable employees because they question management policies and procedures; they may label these employees “difficult to work with” and chastised them for not being team players.

In one company, a manager asked a team leader to assume responsibility for his “12 troublemakers” so he could get them off his major account. When the employees began to report to her, much to her surprise, she found she was managing “a corral full of stallions,” excellent performers who needed boundaries and an opportunity to provide input on how things could be improved. The team leader knew the value of these employees and was able to capitalize on this talented group of individuals.

Objectively, every employee should be “valued,” but not every employee in every job is “valuable.” Some employees are working in the wrong place; they are simply not the right person for the job; they don't have the qualities, characteristics, and ability to contribute. However, they may be valuable elsewhere in the company. The fact that they are not "valuable" in this job does not mean I shouldn't respect or appreciate (value) them as a people.

Managers require maturity to understand the difference between "valued" and "valuable." They have difficulty assessing how valuable an employee is for many reasons. Some organizations have poor job definition, leaving managers to say, “How can I assess whether employees are a good fit if I don't know what I'm trying to fit them into?” Managers may have personality conflicts with some employees who “push their buttons;” they are never able to assess them fairly. Finally, some managers have poor management skills; if they do not have the skill of “assessing and coaching,” then they are unable to judge an employee’s fit for a job.

The manager who asked the team leader to take the 12 rebels didn't value the people, nor recognize that they could contribute (could be valuable) somewhere else in the organization. He failed because the job of a manager is not to label (i.e., “troublemakers”), but to help employees succeed.

“Teaming” between an employee and the company is an essential component of having a valuable employee. The company’s role is to identify a person who has the right attributes for the job (the company recruits, hires, orients, and trains well). And, the company has a job description that is well-understood by both parties. The employee’s role is to “step up to the plate” to learn, contribute to the objectives, and encourage others (i.e., be a team player). We need to see in a human being a desire to contribute. The employee is not always perfect, but we see characteristics and abilities that we admire; we are willing to team with him or her to get the job done. We, as managers, are constantly assessing and managing the fit.

Do you know who your valuable employees are? Are you teaming with them for success?

In the 1981 article “The Employee as Customer,” L.L. Berry states that, whether managing customers or employees, “the central purpose remains the same: the attraction of patronage through the satisfaction of needs and wants.” So whether we deal with customers or employees, the interaction is the same. It requires that we satisfy their needs and wants.

In the old days, a customer conflict could be settled by saying, “That’s our policy.” We told our customers that we treated all of them the same and that they had no recourse if they were unhappy. Customers don’t stand for that any more; they go to a competitor. How long will it be before all of our employees “wake up” to “consistent treatment” that fails to meet their needs? And, what will be their recourse? Most likely, they will find new employers.

Customers who are satisfied have higher repurchase intentions. Employees who are satisfied have higher intentions of staying with the organization, leading to reduced turnover.

We can no longer afford to view our frontline employee as a low-paid servant or a replaceable unit. We must transition to seeing them as customers. Employees are not only individuals who must listen to management, but also people to whom management must listen.

Is your organization willing to change its employee paradigm to view frontline employees as customers?

I came across the following quote from Henry Ford’s autobiography. He is describing the 7,000 specialized jobs required to manufacture a Model T:

“949 required strong, able-bodied and partially physically perfect men. 3338 needed men of merely ordinary physical strength, most of the rest could be performed by women or older children, and we found that 760 could be filled by legless men, 2627 by one-legged men, two by armless men, 715 by one-armed men and 10 by blind men.” (Ford, My Life and Work, 1923).

This quote epitomizes the industrial age’s penchant to employ parts of people. People were considered expendable and replaceable. The whole person (emotions, interpersonal issues, conflicting needs, family demands and obligations) was not considered. Employees were simply another cog in the great machinery.

While most companies would not describe their views of employees as “replaceable units,” often their actions speak volumes. For example, how many times have you heard, “Agents must check their life at the door; this is no place for personal business.” And how many call centers still don’t have a convenient way for parents to receive messages about problems involving their children?

In today’s turbulent workplace, a stable workforce had become a significant competitive advantage. We must view employees as valuable contributors whose opinions and perceptions are important sources of knowledge.

Those of us who work in the industry struggle to find the right people for our call centers. I can’t tell you how many times exasperated HR professionals tell me they are having a difficult (or impossible) time filling their next new-hire training classes, and that they are beginning to hire out of desperation. Potential candidates are so scarce, they say, that they feel like they are applying “the mirror test” to applicants (you know the one, hold a mirror up to a candidates nose and if there is condensation, he or she is qualified).

The bad news is that finding the right people will not be getting easier in the foreseeable future. We are entering an even greater talent and labor crisis. Let’s look at the causative factors.

Economy: The recent “down” economy encourages people to stay in their jobs for fear they will not be able to find other work. However, research indicates that when the job market improves, people are poised to leave. One researcher predicts that employee turnover will double as the economy recovers.

Job growth: As an economy recovers, the job market grows. Although layoffs continue in the U.S. job market, we are still adding millions of job each year.

Labor shortage: By 2008, the Bureau of Labor Statistics predicts a shortage of 10 million workers (U.S. Department of Labor, Bureau of Labor Statistics 2003). The number of available workers in the U.S. diminished during the last 20 years, and the big baby boomer generation is about to retire. The projected availability of “replacement workers” is too small to fill the gap.

Talent shortage: Employee retention / turnover isn’t just about headcount. It’s about getting the right people in the right job—and retaining them. Talented people are most companies’ competitive advantage. In the future, the competition for talented workers will magnify the effects of the labor shortage; there won’t be enough talented workers to fill the right slots.

Our job as managers of talented labor is to develop strategies that lessen the impact of these factors on our organization. Researchers say these projections are all but inevitable. Consider yourself forewarned—now let’s get forearmed.

Guess what would be the best action you could take to satisfy your contact center employees. Pay more money? Provide better working conditions? Foster better relationships between management and employees? Establish career paths?

Congratulations – you are correct!

What? How can I say that when I have no idea how you answered? Truth is, no matter what you said, I can find some article or research that validates your choice. If you have a pet project designed to satisfy your employees, you’re in luck. I can definitely find you “research” that backs your position.

Finding the research that supports most any initiative is easy, but actually satisfying your employees is difficult. They may have their own ideas about what satisfies them. You have a myriad of opinions and should realize there is no “silver bullet” solution. Use the opinions and internal and external research to “customize” the solution for your situation.

Internal research means “ask the employees.” For external research, rely on me for some of the answers. I have found so much information, and a lot of it seemed contradictory until I examine the methodology and intent of the studies. The next series of blogs is a study of the studies of employee satisfaction.