'Tis the season for employee-turnover

Analysis

'Tis the season for employee-turnover

July is a month in many businesses where the rate of employee turnover is higher than usual.

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July is a month in many businesses where the rate of employee turnover is higher than usual. It is also likely to be a month where the proportion of long-serving employees who resign or retire is much higher than normal.

Such resignations often take the employer by surprise, and can be very costly, but if you watch for the signs, you may be able to see some of them coming. If so, you might be able to take action to prevent the loss of these employees.

Why is July a popular month for resignations and retirements?

Long-serving employees frequently have large annual and long service leave accruals, and may be entitled to at least partial superannuation payments as well.

If they are not moving to other full-time employment, it makes financial sense for them to receive these payments in a financial year when they do not work the full 12 months, as the tax situation will be more favourable.

The nature of such resignations and retirements means that the employees have often planned them well in advance and wait for the new financial year to implement them. However if a number of experienced employees submit resignations in the same month, the loss of skills and knowledge to the business can be very considerable, not to mention the replacement costs.

The issues for employers are:

  • are there warning signs that these resignations or retirements are imminent;
  • and is it possible to take some preventive action and retain at least some employees?
Reading the warning signs

Anecdotal evidence suggests that employees who are actively looking for other jobs and/or who are about to resign will often provide subtle indicators such as the following:

  • improvement in their grooming and dress;
  • personal items start to disappear from their work stations;
  • they work less overtime or take less work home;
  • different patterns of absenteeism, sick leave, etc;
  • variations in job performance – usually it deteriorates, but where the nature of the work is such that it can be demonstrated to other employers, it may improve significantly;
  • making phone calls away from their own work stations, or on mobile phones instead of office phones.

Most of the above signs may also apply to employees who have decided to leave but do not have another job to go to.

The most obvious indicator, however, is where an employee who is normally willing to participate in work discussions and voice his or her views ‘goes quiet’, contributing little unless directly asked and tending to avoid meetings, etc. This is the ‘small target’ tactic.

Another sign that a long-serving employee may be working up to a resignation or sudden retirement is if he or she expresses dissatisfaction or frustration with various work issues.

It often means that the employee is contemplating leaving, but hasn’t yet made his or her mind up, or perhaps even hopes that someone will notice and encourage him or her not to leave.

What can you do?

If you have valuable long-term employees who are displaying some of the signs described above, make a point of maintaining regular informal contact with them.

Use this contact to provide opportunities for them to raise concerns or dissatisfaction in a non-threatening environment. However, more than a sympathetic ear is required – you must be prepared to act positively to fix any problems, not just fob the employee off with a promise of a ‘review’ or similar.

At an overall level, organisation climate/culture surveys (see previous story) may provide information on emerging trends and problems and demographic data on employee work preferences and needs. If acted on promptly, these findings may prevent turnover from becoming an issue in the first place.

Changing work arrangements to suit

Many long-serving employees reach the stage where their financial security and personal needs are such that they no longer need to work full time.

They may seek to improve their work/life balance and look for new work opportunities, but feel that if they approach their current employer and express such preferences, they will no longer be valued as employees.

For example, they may fear being regarded as ‘lacking commitment’ or ‘retired on the job’. From the organisation’s viewpoint, it is usually better to retain their skills and knowledge in at least a limited capacity than not at all, and if you insist on maintaining full-time employment you will seldom succeed in changing their minds.

A wide range of flexible work options can be considered – phased retirement programs, part-time work, casual work, contract work, consulting work, working from home (particularly valuable if the employee is moving residence) and assistance with involvement in community or voluntary work.

If your organisation already has policies that cover these arrangements, discuss them with employees.

Where arrangements do not exist, consider introducing them as part of an overall retention strategy. It is also important that the organisation culture – which includes the attitudes and behaviour of managers – is seen as supporting such working arrangements.

To protect both parties, encourage the employee to seek reputable financial and other advice on his or her position before making any change to employment arrangements.

Avoid stereotyping

Finally, a general warning.

Some managers, particularly new ones, seem hell-bent on ‘driving cultural change’ because they perceive that the organisation needs to change.

They may see long-serving employees as representing the ‘old’ culture and resisting their attempts to make changes – which may or may not actually be the case. One of their tactics may be to attempt to incite such employees to leave by denigrating them with labels such as ‘time-servers’ or similar.

Such tactics often hit the wrong targets, quite apart from their potential illegality and divisive nature. Plenty of employees may decide to leave, but they are most likely to be the more valuable long-term ones who can more easily find other employment, or who can afford to resign or retire at a time of their choosing.

The true ‘time-servers’, on the other hand, will dig in and the organisation will remain stuck with them until it provides an attractive redundancy package. Some organisations that have incited employees to leave have found themselves having to introduce a ‘retention strategy’ not long afterwards.

The moral is this: don’t stereotype employees on the basis of length of service, age or any other personal attribute. Treat each person as an individual and assess their performance, potential and value to the business independently of such attributes.

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