Analysis
of Retention and Turnover

Straightforward questions and simple arithmetic provide important facts about turnover, retention and job content in organizations, but we still get surprised at how little good managers know about these issues. Perhaps there are surprises in store for you.

Traditional organizations are built, not on people (as motivational speakers would have us believe) but on jobs. Jobs are the basic building block. As people come and go throughout the years, jobs remain and are refilled.

Sticky and Slippery Jobs. Some jobs – like particularly intriguing web pages – are “sticky;” they tend to hold onto people. Other jobs are slippery, with great numbers of people gliding into them and then right out of them quickly. If you want to influence personnel turnover, if you want to increase the retention of that knowledge capital you invest to create, get to know a lot about the stickiness and slipperiness of the jobs in your area.

We begin many of our projects by analyzing the work done in an operation’s jobs. ChangeCraft’s Functional Job Analysis uses a disciplined process to interview the occupants of each job to learn the job’s Purpose, Success Indicators, Failure Indicators, Tasks (Activities), Responsibilities and Authority. We database the information we collect so we can detach the job titles and study all the work done in the organization. Once the data is collected, we look for duplications, for work that adds no value for paying customers and for interesting patterns.

Stupid Work. We nearly always find loads of what employees have taught us to call “stupid work:” activities (such as compiling reports no one reads) that must be regularly undertaken, but which are completely unfulfilling to the employee (and, often meaningless to the organization). Jobs filled with stupid work are often very slippery and these jobs create turnover problems.

In one organization, many people told us that their turnover rate was 41% (never 40% or 42%). Our study revealed that, during the previous year, there had been no turnover at all in nearly two-dozen (mostly single-occupant) jobs. But, the one critically important frontline job that employed most of the operation’s people had 187% turnover! It turns out that the Human Resources department had “explained” that people who stayed less than three months – the intensive training period in company-specific skills – should not be counted in turnover rates: they were “churn,” not turnover. Playing with the numbers in this way kept attention away from the crisis in that one slippery frontline job, a job we found was chock full of stupid work.

Stupid Systems. When we study all of an organization’s job activities – with the job titles removed – we often find patterns that point out entire systems or processes that constantly fail, creating the need for “work-around” solutions, and lots of other symptoms that mask the real problem.

Here are a couple of examples.

• A customer service organization employed more than 100 people in about three-dozen different jobs. Overall employee turnover topped 100% annually, but nearly all of it was in non-management positions.
• A traditional quality control system had been installed to reduce the enormous number of errors made by inexperienced newcomers. The organization employed a staff of three full time trainers to prepare people for the torrent of open positions. Headcount was rising, and what had been a roomy facility was now cramped.

Our Functional Job Analysis documented that, of nearly 1,000 job responsibilities, over a third added no value to the service customers received. An alarming proportion of the job activities involved checking the work of others to eliminate errors. The number of jobs primarily dedicated to checking others’ work was growing. These findings led us to investigate the cause of the errors (thought to be inexperienced people), and we found that the organization’s core systems and work processes were producing the errors. People were leaving the job because they were making so many errors, then being checked and “caught”  so frequently. Until the core systems were replaced, the employee turnover and growth of “checking” work spiraled out of control. Stupid systems drove people away.

Another of our retention studies – in an organization that claimed to have “high-normal” turnover rates – yielded the fact that there was nearly no turnover in employees with more than three years’ tenure, but few newly-hired employees lasted three years. This was in a company that was wholly owned by its employees. Seasoned people knew that, if they invested to exercise their stock options, they would retire as millionaires. Those who did invest stayed.

We were able to connect the curious retention pattern with the fact that, after the third anniversary, employees were allowed to buy stock in the enterprise. Only a limited number of shares were made available each year. Senior people snapped up all the shares that had been offered to, and declined by, more junior, poorly paid employees.

The company’s system of sharing its stock with people who stayed long enough to demonstrate their commitment and loyalty had inadvertently created a pattern of “eating the young” in old-timers who wanted more of the scarce stock for themselves. This company not only had a serious retention problem with its newer people, the pattern was creating an older and older workforce and decimating the next generation of employees. This stupid system – created to hold onto people – drove the turnover problem.

Single-Occupant Jobs. Job titles held by only one person in an organization tend to have lower turnover than job titles held by many people. That may appear to offer a magic key to increasing retention, but we believe it does just the opposite. When a pattern of errors is seen in one job, when it becomes difficult to train people for a certain job, or when a job expands to encompass “too much” responsibility, traditional organizations tend to split the job into two. The new job tends to be much more specialized, and may need only one highly skilled person to do the work: a single-occupant job. The new job is typically seen as more valuable (thus, higher paid) than the old job and its work is often more interesting. Over time, as many specialist positions are splintered off the original job, the position still occupied by lots of people becomes more and more boring. While single-occupant jobs are often sticky, their existence – and proliferation – tends to make the original job more slippery, driving up the turnover rate. What’s more, in organizations that have a high percentage of single-occupant positions, all those jobs tend to be increasingly detached from the core service or product of the group and from its paying customers. This makes all the jobs feel less important to the organization’s overall success. And that drives up personnel turnover.

Turnover Drives Turnover. The higher your employee turnover rate has been in the past, the higher it will likely be in the future. The quicker people come and go, the less it makes sense to invest in their skills and their integration into the group. Once this cycle has been established, organizations tend to expect less and less of newcomers, which, in turn, encourages newcomers to leave sooner.