Trouble with Retention? Assume It’s Your Fault

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Trouble with Retention? Assume It’s Your Fault

“It’s easy to fire people,” says Carl Allison, component division manager for 84 Lumber, and even easier to write off someone leaving “because he didn’t fit in or it just didn’t work out.” Yet, in a challenging labor market, an industry where entry-level pay is low, and turnover is traditionally high, easy comes at what cost?

From fringe benefits, to doing their best to provide job satisfaction, to dealing with laws that can be costly and complex, not everyone understands the investment businesses make in each new hire. Carl shared some hard facts on the high costs of turnover. In addition to the lost productivity and cultural impacts that high turnover can have on your team, he says, “losing employees is expensive,” with costs reaching more than 15% of a worker’s annual salary.

As he discussed the challenge of raising retention rates in his own company, Carl made a bold statement: “When someone quits, always assume it’s your fault.” He encouraged the group of more than 90 attendees to call each employee that leaves to better understand what wasn’t working or could have been done differently to have retained that worker. “It’s so important, especially when you’re in a situation where you can’t find people,” he says. “Don’t assume you know why they left. There’s often another piece to it.” 

In Carl’s experience, these phone calls have been invaluable for understanding what changes can be made to make his company more in tune with entry-level folks and their frame of reference. “Sometimes you can glean why you simply shouldn’t hire a certain type of person,” he says, but more often he finds that people leave because of their experience with a first-line supervisor.

Based on that reality, “how do you hold your supervisors accountable when you let someone go or they quit?” Carl asks. While he admits that it doesn’t always make for a comfortable conversation, “having the courage to coach people and help them improve their leadership skills” is critical to moving the team and the business in the right direction.

The bottom line? Employment management is a key aspect of every business because people are the lifeblood of a successful organization. While there is a lot that goes into a successful hiring, training, and retention program, some old-fashioned outreach and introspection are key first steps to changing things. 

See digital edition for estimated turnover costs graph.