The study, which included 946 companies and a complementary survey of 13,000 employees, found that the United States has the highest median voluntary turnover rate, at 11 percent, while Latin America has the lowest, at 5 percent. In addition, more than half of the companies report difficulty retaining top-performing (52 percent) and critical-skill (56 percent) workers. But that is not the most significant finding.
What is most interesting to me is the apparent disconnect between employers and employees on pinpointing the problem. Fifty-two percent of the employers say the number one reason they struggle to retain employees is base pay whereas 37 percent of employees cite stress levels (base pay came in second, followed by promotion opportunities, career development opportunities, and work/life balance).
The study found that when employees are satisfied with stress levels and work/life balance, 86 percent are more inclined to stay with their company (versus 64 percent when dissatisfied) and 88 percent are more likely to recommend it as a place to work (versus 55 percent when dissatisfied).
“Worldwide, the frenetic pace of modern business is taking its toll on employees,” said Adam Sorensen, global total rewards practice leader at World at Work. “There’s no question that employees are more likely to leave or speak badly of their workplace if they feel overburdened. Companies that take steps to ensure that stress levels are not onerous will save money in the long run by reducing attrition.”
The concept that employees are feeling overburdened in the workplace is not new. There was an article by Douglas Ready and Jay Conger about this subject in the Harvard Business Review in June. The authors had conducted a study in 2005 that revealed virtually all companies indicated that they had an insufficient pipeline of high-potential employees to fill strategic management roles.
In the article, they pinpointed that passion must start at the top and infuse corporate culture; otherwise, talent management processes can deteriorate into bureaucratic routines. In other words, when you tally up the studies, companies are throwing money at employees but money does not make people feel passionate about their jobs, probably because the stress levels aren’t worth it.
Much like we see in social networks, it’s too much management and not enough leadership. And, obviously, there is a breakdown in communication because employers think that throwing money at employees reduces stress.
If there was better communication, companies would already know that it’s not the money, it’s the environment. Case in point: one-half of the companies said that their managers do a good job at performance management, but U.S. companies received the lowest management ratings (Asia-Pacific companies received the highest). Do you think there might be a correlation to management, non-communication, employee stress, and retention? Naw, couldn’t be. Could it?
What seems to be happening is that companies are attempting to bribe their way out of developing positive corporate cultures by increasing incentive programs while raising financial targets to earn those incentives. The reason they think it works is because the people most likely to be promoted and support these models are those who chased after financial lures in the first place.
But for the rest of the stressed-out workforce, they seem to be escaping through Facebook and other online social networks where they hook up with recruiters and potential employers who promise that the grass just might be greener someplace else.
Time out. That's not measurable, some might say.
“Unlike processes, which can be copied by competitors, passion is very difficult to duplicate. Nevertheless, there are companies that can build it into their cultures” — Harvard Business Review
The beginning of a solution is right in front of management’s nose (literally so if you are reading this post). More than anything else, companies that want to succeed tomorrow must invest in better two-way communication streams between themselves and their employees (never mind consumers for a minute). Because the simple truth is that if this communication existed, then there would be no disconnect between why employees leave and why employers think they leave.
So if you ask me, employers need to train management to be strategic and passionate leaders who motivate not just with Jolly Ranchers (like they try to do to my son when he is in school) but with open communication that instills a sense of passion and trust with the company. Training managers to communicate goals rather than enforce corporate policy is one solution. Closed social networks or even internal blogs for employees might be another (recognizing many social networks struggle with the concept of community).
“Employers that are best at building and maintaining the right workforce are often the best at aligning workers’ rewards with the company’s goals. Their performance management programs clearly communicate what workers need to do to get ahead and to improve company performance. This builds a sense of teamwork that makes it easier to retain employees, as well as attract high-potential newcomers.” — Watson Wyatt
