People leave any company for a variety of reasons, however according to The 7 Hidden Reasons Employees Leave written by Leigh Branham, American Management Association, NY, 2012 many of the reasons are internal and can be worked on. If the costs of replacing employees falls it is a cost savings based on recruiting costs about 1 times salary. It would expected if people leaving was below 5%, then the human resources function would have the ability to continue to work on maintain low levels of voluntary leaving. The issue is always what is a good level and what is a terrible level of turnover?

The 7 Hidden Reasons Employees Leave are:

5. Feeling Devalued and Unrecognized

It is really quite simple: Everyone want to feel important. It does not have to cost much to recognize people. Recognition cannot replace pay, it can only add to it. Some of recognition is done on an irregular basis, just make your reasoning consistent. The methods are many and can be as creative as possible, they just need to be done.

6. Stress from Overwork and Work-Life Imbalance

The culture of the organization often overrules these considerations. Every organization has a culture, it stems from senior management. either people fit into it or they have to determine whether they need to find work somewhere else. Are the rewards worth it? Both employer and employee have to figure out what they want or do not want and there are many methods to make it seemingly easier to achieve both.

7. Loss of Trust and Confidence in Senior Leaders

Every employee in some fashion looks to the actions of the senior management. What they do and how they do it reflects the culture and actions of the organization. The larger the organization, the more the “average” worker is disconnected from the senior management and believe the interest they have in their satisfaction and well-being. This translates to advice from Sam Walton – it takes a week or two before employees to start treating customers the same way an employer is treating an employee. The easy and hard way to deal with it is to place trust and confidence in your workforce to do the right thing.

In the book there are a number of examples of companies which had high turnover rates and reduced them. Some examples are UPS in Buffalo had a turnover rate of greater than 50% and reduced to about 5% with savings of over a $ 1 million; Mike’s Car Wash the average turnover is typically 75 – 85% has been reduced to 55%; American Home Shield had a turnover of 89% reduced to 35% and FleetBoston Financial which had turnover of 25 to 40% which was reduced to 15 to 22% with a cost savings of $50 million. Besides the cost savings, customers get better service.

Linking to dividend paying stocks, if companies you own have high turnover of staff, then there is money being wasted. There are strategies to be implemented to keep the staff longer and become more productive. If they are not being implemented, how do you trust the company to keep costs down in other areas of the company. In the service companies the most important asset is people, if people are leaving what gets done and how long do expect your dividends to be paid?

There are more questions than answers, till the next time – to raising questions