Best-selling author and CEO of C-Suite Analytics, Dick Finnegan has been cited by Businessweek, Chief Executive magazine, and Consulting magazine as the leading thinker on employee retention. I had a chance to query him on a topic of great importance to many employers.
JATHAN JANOVE: We hear a lot about how HR needs to talk meaningful metrics to the C-Suite. What’s a good example in the employee retention context?
DICK FINNEGAN: The usual situation occurs when an HR executive takes turnover data to a CEO who tries to better understand the data by asking how the turnover rate compares to the turnover rate at peer companies. If the HR executive gives favorable news such as “We’re at 18% and the peer group is at 20%,” the CEO is pleased. But if the HR executive initially reports the data along with its cost by saying “Our 18% turnover is costing our company $5.4 million per year,” the CEO will say, “We need to fix this!” and will never ask for comparison data.
JJ: So if the HR executive can get the CEO to act, what exactly should the CEO do?
DF: After 20 years of helping companies cut turnover, I can tell you the most important thing CEOs can do is establish retention goals and hold first-line supervisors accountable for achieving them. Despite our being conditioned to think employees stay or leave due to pay, the data continues to tell us that the main reason employees stay or leave is because of their immediate supervisor.
JJ: What about exit interviews—do they work?
DF: In the past year I’ve given presentations to about 5,000 HR professionals. I ask if they do exit surveys. Nearly all raise their hands. Then I ask how many would say doing so has made their companies better. To date, the total number of hands raised is nine.
JJ: How about engagement surveys—do they work?
DF: Engagement surveys are more useful because they at least give benchmark data. What they fail to do, however, is provide solutions. Employees report that they want more recognition so companies invent incentives like “employee of the month” program. Or, employees want more communication so companies create newsletters or hold town hall meetings. The problem is, employees don’t want one-size-fits-all programs. They want better supervision. What good is having an “employee of the month” program if I never get it? Employees want to be recognized regularly by their supervisor rather than learn there is now an “employee of the month” program and hope some day that they win.
JJ: You keep getting back to better supervision as the key to retention and engagement. Why?
DF: Studies by Gallup, Yahoo!, PwC Saratoga, Kenexa, and others all reflect this quote from Marcus Buckingham and Curt Coffman of the Gallup Organization: “If you have a turnover problem, look first to your managers.” Executives and often HR think they can solve turnover and disengagement with programs. However, programs cannot overcome a non-trusted boss. When’s the last time you heard a really good worker say, “My boss treats me like dirt but I am holding on for Employee Appreciation Week”? It just doesn’t happen.
JJ: So what do you recommend?
DF: I recommend that direct supervisors conduct “stay interviews” on a one-on-one basis to connect with employees and to learn why they stay in addition to what that supervisor can do to keep that employee longer and to engage him or her better. This sounds too old-fashioned, too non-electronic to work, but our research says it cuts turnover by up to 70% and significantly cures disengagement.
JJ: How do you motivate supervisors to conduct stay interviews?
DF: The same way we motivate them to do anything else, which is by establishing retention and engagement goals and holding them accountable. Our clients forecast how long each employee will stay based on stay interview results. When employees don’t stay, leadership checks to see if supervisors are conducting stay interviews and developing stay plans. Just as with sales and service, they establish goals, hold supervisors accountable, coach them to succeed, reward them positively for success, and deal with them if they fail. That’s what’s required. If you want them to stay, don’t wait for the exit.
JJ: Thank you Dick for sharing your excellent insight.
Finnegan’s research is cause for reflection. In your organization, what questions are your supervisors asking? Have you equipped them to ask questions designed to find out the following: “What are the most important things we can do to make sure our employees remain with us?”
Dick Finnegan is a leading author, speaker, and CEO of C-Suite Analytics.