REDUCING EMPLOYEE TURNOVER
by Michael J. Galante

Turnover is inevitable. Employees come and go, people retire and die. Yet, turnover can be a positive process that gives a business new people, new vigor and new ideas. On the other hand, turnover can also become a profit-killing liability that debilitates a company. J. Douglas Phillips, writing in Personnel Journal, has blamed the high cost of employee turnover for the decline of productivity and the inability of many U.S. firms to compete in world markets. Turnover management and analysis is important to every business and every department. The excessive costs of turnover are frequently overlooked but are an important factor that affects a company's bottom line.Turnover has many causes and it can accelerate when events cause employees morale to drop. When conditions decline in a company, the first to leave are often the best employees. Those who are the most talented and whose abilities are most in demand elsewhere are most likely to exercise their options. When a company loses its best people, the effect can be disastrous. Turnover can also be the result of a "revolving door" hiring policy. This occurs in sales organizations when the boss has a "throw the mud against the wall and hope some of it sticks" attitude. It is also seen where a company does not have a clear idea of what attributes successful employees must have.In the absence of clear hiring criteria, a company will hire those who meet a minimum standard and will evaluate job-fitness through trial and error. This is an expensive method when you take into account the costs of training and the loss of productivity. Excessive turnover is often a symptom of fundamental problems within the business. If, for example, a company has a department where the turnover is twice or three times the rate in other departments, it could be the sign of a problem that could range from poor hiring technique to sexual harassment. Thus, excessive turnover should be viewed as a sign that there are other problems which must be identified and addressed. When these problems are dealt with successfully, turnover problems will be minimized. Attempts at solving the turnover dilemma which ignore fundamental problems will be no more successful that trying to solve morale problems by putting up posters with pithy slogans. A primary place to start solving turnover problems is in your hiring system. When you can specifically define the qualities and characteristics that contribute to job-fit, you can do a better job of identifying the job candidates who will find long-term success in your company. There are tools on the market to help you achieve the goal of hiring people who will succeed in their jobs. These tools measure mental abilities, interests and motivation and job-related personality characteristics. A study of your present employees results in a Success Pattern that you use for hiring. The Success Pattern will graphically display the qualities and characteristics which your successful employees posses. This pattern will allow you to evaluate job applicants to see how closely they match with people who have already demonstrated their ability to perform the job successfully. When you hire someone who lacks job-fit, you do no one a favor. When people don't fit a job, they become unhappy, suffer from stress-related problems and lose self-image when they ultimately fail. The company that hires them will have productivity and morale problems and will likely see increases in the cost of health care plans. It is better to disappoint job applicants who do not fit with your Success Pattern than to hire them and subject them to eventual failure. When you work at attacking the root causes of turnover, you make your business a better place to work, a more productive environment and a more profitable enterprise.