Tag Archives: Turnover

May 14, 2013 · 4:30 am

Onboarding: Not Rocket Science

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As HR and other leaders grapple with high turnover rates among the Gen Y cohort (see last week’s post here), all kinds of issues get raised. Is the turnover due to “special” characteristics inherent in Gen Y? Is the turnover due to lack of education and training opportunities? Naivete on the part of Gen Y – the world of work doesn’t match their expectations? Could a lack of thoughtful onboarding play a part?

The Aberdeen Group published Onboarding 2013: A new Look at New Hires last month and author Madeline Laurano provides data that might help organizations become more effective in retaining the youngest of their workforce.

First of all, Aberdeen reports that only 37% of employers have invested in a formal onboarding program for longer than two years. Surveys report that it’s difficult to quantify the ROI on formal onboarding programs so “basic orientation” activities are used in substitution. Socializing new hires into the organization’s culture is popular, but hard to measure. And so, “onboarding programs have fallen short and become little more than a transition from recruitment to employee development.” Interesting.

But attention is starting to be paid and, surprise!, it’s all about productivity. One of the quickest routes to ROI is the improvement of productivity and that’s something organizations can measure. Other drivers for looking at new ways to onboard new hires include improving employee engagement, reducing turnover and improving new hire assimilation.

But, as the graph below shows, there’s lots of opportunity to make onboarding programs more robust, strategic and productive by spending more time.

Aberdeen Group Onboarding 2013 Fig 3

And it doesn’t have to be rocket science! The kinds of strategies being used to drive stronger onboarding programs include the following:

  • Creating new hire checklists
  • Introducing new hires to the go-to people
  • Providing forms to new hires before day one
  • Ensuring compliance on all new hire forms
  • Creating peer networking opportunities/events

But the real key appears to be creating a bridge from the candidate experience to learning/development and performance management. After offer acceptance, Best-in-Class employers are more than twice as likely than all other organizations “to integrate data from onboarding into performance management, providing key stakeholders with development plans of new hires and to tie the source of a candidate to their performance as an employee.”

Aberdeen Group Onboarding 2013 Fig 11

But still, only 26% of Best-in-Class employers enroll new hires in learning and development programs compared to 11% of all others. Hmmm….

Laurano concludes the report with recommended actions for employers in Best-in-Class, Average and Laggard categories. For the Average and Laggard categories they are not rocket science. For the Best-in-Class category, a little rocket science might be involved.

Laggard Steps to Onboarding Success

  • Establish a clear owner
  • Provide strong visibility
  • Extend the onboarding process

Industry Average Steps on Onboarding Success

  • Align onboarding with learning initiatives
  • Define metrics in advance
  • Invest in onboarding technology

Best-in-Class Steps to Onboarding Success

  • Consider gamification
  • Include cross-boarding
  • Balance tactical and strategic elements

Think about these as you and other leaders in your organization wrestle with the high turnover rate in your Gen Y employees. And take a look at this report.

Aberdeen Group reports are very easily consumed. They’re written in normal English and have an easy to understand structure. Even if you can’t spend real money to make your onboarding program more productive, you can certainly get smarter about what works and make some adjustments based on data to improve your outcomes. That’s the whole point of research, right?

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Filed under Aberdeen Group, Candidate Experience, China Gorman, Data Point Tuesday, Gen Y, HR Data, Onboarding, Turnover

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May 7, 2013 · 4:30 am

Gen Y’s Self-fulfilling Prophecy

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Accenture recently published its 2013 College Graduate Employment Survey Findings. Lots of great data. Especially if you plan to hire recent college grads. In fact, some of the data are surprising.

One of the important takeaways is that employers have unrealistic expectations for the skills of the hires they make out of college. They think these young people should be able to hit the ground running and are surprised and disappointed when they don’t. And to compound the problem, these employers are not investing in training initiatives to get the newly hired up to speed in the short term or effective in the long term. This is all pretty logical. It’s good data and if you plan on hiring entry level employees from the ranks of the newly graduated, you should read this.

But here’s what caught my attention. It’s about the willingness to commit. And it isn’t the first time I’ve seen data like these.

Young people, entering the economy for the first time, want to commit to their employers. It’s not what we expect, I know. We expect these youngsters to be gone in the career equivalent of sixty seconds. And sometimes they are. But it’s important to know that that isn’t what they want! This isn’t what they expect!

From Accenture:  The class of 2013 is expecting more career longevity from their first jobs:  68% of pending 2013 college grads expect to be at their first job more than 3 years compared to 49% of 2011/2012 college grads.

Accenture career longevity in first jobs 2013

And from the Achievers Class of 2012 white paper:

Achievers Class of 2012 White Paper

In this survey, more than 70% of 2012 college graduates expected to be with their first/next employer 3 years or longer — and 48% expected to be with their first/next employer 5 years or more. Surprising, right? Not what we expect, right? Not what we “know” about Gen Y, right?

But the BLS shows us what happens once they join our organizations:

BLS years of tenure by age

So, young people entering the economy for the first time with a newly minted degree are filled with optimism and have every intention of committing to their first employer for 5 years or more. Is it naivte or is it a real desire to commit, belong and make a difference?

And what happens once they start that first job that impels them out the door in 18 months or less?  Are employers so inept at selection that they really can’t hire employees that will persist? Are young people so naïve that they don’t really know what they’re signing up for and leave when reality doesn’t match expectations? Or, as the Accenture survey suggests, are young people disappointed when expected training and development doesn’t materialize and they leave in search of greater learning opportunities?

Clearly this is a complex issue with lots of dynamics, as the Accenture survey results show. However, if we started with the belief and understanding that young people really do want to engage and commit to their employer, would we be more likely to invest in developing their skills?

If we started with the belief and understanding that young people really do want to engage and commit to their employer, would we create onboarding processes that ensure expectations – on both sides – are being understood and met?

If we started with the belief and understanding that young people really do want to engage and commit to their employer, how would we approach them differently?

I suspect that most employers believe that there’s no return in investing in a talent pool that will be gone in 60 seconds.

I further suspect that the EVP that is sold in the recruiting process doesn’t exactly come to life once the recruit joins the organization.

But I suspect that the real issue is that Gen X and Baby Boomer managers, supervisors and recruiters believe all the negative stereotypes about Gen Y and their lack of commitment to any agendas other than their own — despite multiple data sources that show just the opposite. And we’ve ended up in this tough reality that has become a full-fledged self-fulfilling prophecy.

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Filed under Accenture, Achievers, Baby Boomers, Bureau of Labor Statistics, China Gorman, Data Point Tuesday, Employee Value Proposition, Gen Y, GenX, HR Data, Turnover, U.S. Department of Labor

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July 17, 2012 · 4:30 am

Paycheck Pessimism

Most people in the HR space know Glassdoor™ as a social media site that gathers anonymous information about employers from current and former employees.  Users can leverage their Facebook network to uncover connections at a company, view current openings, as well as review proprietary information that includes salary reports, company reviews, interview questions, CEO approval ratings and more.  It’s an incredibly useful site for job seekers to get the real skinny on a potential employer from the people who know it best:  its employees.

Of course, for employers and HR professionals, the site offers a full array of branding and recruitment-oriented services including the ability to create enhanced company profiles, Facebook career profiles, targeted job ads and more.

But for our purposes at Data Point Tuesday, we like Glassdoor™ because of its Quarterly Employment Confidence Survey.  Couple this report with monthly BLS reports and you get a robust picture of workforce and employer confidence and other dynamics.

For example, the Glassdoor Employment Confidence Survey surveys employees on their confidence in the areas of pay raises, job market expectations, company outlook and job security.  It’s great data and it’s presented in a highly consumable format.

The most recent survey was conducted by Harris Interactive between June 12 and 14 of 2,208 adults 18 years or older and was published on July 6.  Generally the data show improving or holding steady opinions on workplace confidence dynamics by employees with the exception of optimism in pay raises.  This dropped since last quarter to 40% (from 43%), while 37 % do not expect a pay increase – a low since the survey began in Q4 2008.

At first glance this seems a little off.  Expectations for a raise are at the lowest point since the 4th quarter of 2008 – and lower than the 4th quarter of 2008 when the economy was at its worst? Aren’t we starting to feel better about the economy?  Well, some of us are and some of us clearly are not!  The report says this:

  • Employee optimism in pay raises has dropped slightly since last quarter to 40%, while 37% reported they do not expect a pay increase…
  • The gender gap is closing around expectations for a pay increase over the next 12 months; 41% of women expect an increase compared to 40% of men.  However, men’s optimism around pay has declined five percentage points since last quarter while women’s optimism crept up one percentage point.
  • Younger workers are significantly less optimistic about pay raises than last quarter; 37% of 18-34 years olds expect pay raises in the next 12 months whereas nearly half (49%) expected raises last quarter.  All of the other age ranges have increased 2-4% from last quarter – 48% of 35-55, 42% of 45-54 and 36% of 55+ year olds.

So, if I read this right, men and young people under 35 report strong declines in optimism about pay increases while women report slight increase in optimism.

Men:  down 5%

Young people:  down 12%

Women:  up 1%.

How does this track with your turnover and engagement data?  Tracking turnover data by gender and age demographic is common.  How about engagement data?  Can you make connections between this lack of reported paycheck optimism among males and young people to the engagement data in your organization?  It might be worth a look.

And it might be worth keeping an eye on during the coming quarters – particularly in relation to the election in November.  Young people played a very active and pivotal role in the last presidential election.  Is their level of paycheck pessimism such that they won’t participate as strongly?  Or will it motivate them to even higher levels of activism?  And how will that translate to your organization’s turnover and engagement rates?

This is what’s so great about data.  They let you connect import dots.  Also, they always raise more questions than answers – but if you’re interested and aware you’ll start asking more of the right questions and connecting critical dots.  And who knows?  That could lead to formulating more effective people management and business risk mitigation strategies.

Isn’t that what HR is all about?

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Filed under Bureau of Labor Statistics, Connecting Dots, Engagement, Glassdoor, HR, HR Data, Turnover

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May 29, 2012 · 2:00 am

What’s your budget?

Great sources of free and relevant talent management data are vendor research, white papers and blogs. Of course, vendors have a bias towards research and conclusions that support their cause, but that doesn’t make the research less interesting or actionable. It just means that the reader has to understand the context.

I read an interesting article in the May issue of Talent Management that referenced a survey done by Cornerstone OnDemand and Harris Interactive on performance management.  I traced the survey results back to a post on the CSOD blog by Charles Coy.  The survey data about the effectiveness of legacy performance management systems is interesting and not at all surprising.  They don’t work and everyone knows it – employees and HR.

What was more interesting to me were the math and sources behind the potential price tag of $2 Ttrillion to U.S. employers in 2012 simply due to voluntary turnover.  That’s right: $2 Trillion!

$2 Trillion is a big number.  A very big number.  Could it be true?  If we take the stats one by one, it absolutely could be true.  Take a look:

Here’s the equation where E = total employees and AW = their average wage (divide total salary cost by the number of FTEs):

(E x .15) x (AW x 2.5) = Total Turnover Cost

Try the math in your organization.  If you have 350 employees and the average wage is $50,000 then

  • 350 x .15 =                                             52
  • Average wage =                                $  50,000.00
  • Average full replacement cost =   $ 125,000.00

52 x $125,000 = $6,500,000.00

And what’s your budget? 

But, you say, your voluntary turnover is only 8%, not 15%.  Well, even if that’s true – and congratulations if it is – that’s still a lot of money.

28 x $125,000.00 = $3,500,000.00

And what’s your budget?

But, you say, that 2.5 times the average wage calculation for replacement costs is way too high.  You don’t buy that the loss of an average employee means a potential loss of intellectual capital or client relationships.  OK.  How about the impact on internal relationships and getting things done?  How about the productivity and morale of colleagues left behind?  How about the experience and job skills that you’ve lost?  Add in the hard costs of recruiting a new hire, the onboarding time, the training time to full productivity and you’ve still got a big number – even if you found and hired replacements really quickly.  Try the math at 1.5 the average wage as the full replacement cost.  With 8% turnover and 1.5 times the average wage, that’s still a big number

28 x $75,000.00 = $2,100.000.00

And what’s your budget?

And what if your voluntary turnover is higher than 15%?  Or what if the training time to productivity is longer than average?  Or what if you – like 52% of employers – can’t find the replacement talent quickly or at all?  Then the impact will be greater.  Much greater.

This is a useful discussion because it can help create a context for the broader conversation about the real cost of voluntary turnover and the cost savings in having an engaged workforce.  It can be part of the rationale in a business case for investing in any of the levers that will increase retention and reduce turnover.

It’s almost budget time in most organizations.  Financial resources are still scarce.  As you plan your 2013 budget requests for more spending on talent management solutions, be prepared with fact and data.  This might help.

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Filed under Average Wage, Budget, China Gorman, Cornerstone OnDemand, Engagement, Harris Interactive, Talent Management, Turnover, Uncategorized

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