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Best Practices in Managing Employee Turnover

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You spend too much time and energy to get the right people on your team to just stop worrying about them once they're on. This slideshare looks at employee turnover and how you can minimize it.

Published in: Business
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Best Practices in Managing Employee Turnover

  1. 1. Jennifer Ferris, CCP Sr. Compensation Professional Mykkah Herner, MA, CCP Director of ISX Services www.payscale.com
  2. 2. Ivan Hurtt S E N I O R P R O D U C T M A N A G E R B A M B O O H R ihurtt@bamboohr.com www.linkedin.com/in/ihurtt Mykkah Herner M O D E R N C O M P E V A N G E L I S T P A Y S C A L E @mykkah_herner MykkahH@payscale.com www.linkedin.com/in/mykkahherner
  3. 3. A Changed Perspective
  4. 4. Millennials will comprise 75% of the global workforce by 2025. - Deloitte Millennials 91% of Millennials expect to stay with your company fewer than three years. – Future Workplace v75% v91% Average tenure for Millennials is 2 years (5 years for Gen X) – Payscale v2yrs
  5. 5. 43% 1yr 90- 200% Within the next 10 years, 43% of the US workforce will be eligible for retirement - Forbes Baby Boomers Among the jobs that 39-44 year olds began, one third ended in less than a year – Forbes Cost of replacing an employee is between 90-200% of their annual salary. – SHRM
  6. 6. 83% 23m 52% 83% Of executives say they’re increasing contingent workers. - Oxford Economics Contingent Workers There’s projected to be 23 million contingent workers by 2017 (up 26% in 2 years) – MBO Partners 52% of Millennials expect to work independently (82% in emerging markets). – Deloitte
  7. 7. • Workforce competency and skills gap • Increased competition • Globalization • Culture • Competition for talent • Stresses on work-life balance • Etc. Additional Dynamics
  8. 8. –Bersin by Deloitte
  9. 9. –Ram Charan Best-selling Author, World-renowned Business Advisor
  10. 10. Defining and Quantifying Turnover
  11. 11. the rate at which people leave a place, company, etc., and are replaced by others
  12. 12. Good Turnover vs. Bad Turnover Add good complexity Low Performer High Performer Voluntary Involuntary
  13. 13. Retention is Still a Major Concern PayScale 2016 CBPR
  14. 14. Retention Compensation Recruitment Engagement Development
  15. 15. Common Myths of Employee Turnover
  16. 16. Turnover is Always Bad http://lolsheaven.com/
  17. 17. Turnover is bad for morale Image: https://www.funergizers.com/3-Massive-Mistakes-Which-Lead-to-Low-Staff-Morale
  18. 18. We can predict turnover based on generation
  19. 19. Turnover is always time-consuming and costly
  20. 20. The Role of Corporate Culture in Turnover
  21. 21. Next Gen vs Traditional Organization Flexible work environment Training ground Strong leadership Transparency of decisions and pay Industry and/or job function Millennials vs Highly tenured
  22. 22. "HR today sits smack-dab in the middle of the most compelling competitive battleground in business, where companies deploy and fight over that most valuable of resources— workforce talent." -Matthew D. Breitfelder HBR: “Why did we ever go into HR”
  23. 23. Business Value H L Strategic Operational Micro Small Mid Large HR viewed as a cost center Transactional HR High-Impact HR HR as a strategic investment Evolution of HR
  24. 24. Business Value H L Strategic Operational Micro Small Mid Large Evolution of HR HR viewed as a cost center Transactional HR High-Impact HR HR as a strategic investment
  25. 25. Understand your true worth as a strategic necessity Eliminate the unnecessary shed all the dead weight Organize your information to lay a foundation for insight Automate the operational set yourself free to do great work Maximize business value align activities to strategic outcomes Solve meaningful problems learn to think, act, and win like a business. Measure and report the value and impact of your work ESCAPE ELEVATE
  26. 26. The Impact of Turnover on your Business
  27. 27. • Morale • Engagement • Performance • Training • Knowledge retention • Nimble to market changes • Cost to replace http://www.corporatelearningnetwork.com/
  28. 28. Setting Your Comp Plan Up for Success
  29. 29. http://businessmodelalchemist.com/blog/2011/11/make-your-business-model- clear-with-vivid-thinking-guest-post-by-dan-roam.html Solid Base Pay Plan Clear Strategy Incentive Plan Competitive Market Pay
  30. 30. What is the right compensation mix for my org?
  31. 31. Compensation Strategy Talent Market(s) Industry Size Location Org type Level of competitiveness How aggressively to pay What to reward Performance, Experience, etc
  32. 32. How do organizations use variable pay? 15.8% 18.1% 61.8% 25.7% 40.0% 14.4% Retention bonuses Hiring bonuses Individual incentive bonuses Team incentive bonuses Spot bonuses or other discretionary bonus programs Other (please specify) PayScale 2016 CBPR
  33. 33. Recruitment and Retention Plans 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Merit-based pay plan Non-discretionary incentive based pay plan Discretionary bonus plan Stock option/grant plan Learning and developmental opportunities More perks-gym memberships, catered lunch, etc Other (please specify) 2016 Plans for Recruiting and Retaining Top Performers, by Company Size Less than 100 Employees 100 - 1,000 Employees More than 1,000 Employees PayScale 2016 CBPR
  34. 34. “I found a salary report on the internet and it says I should be paid more…”
  35. 35. Immediate Actions  Calculate turnover rate  Identify good and bad turnover  Brainstorm retention efforts that work  Evaluate your comp plan – does it align with org objectives for retention?
  36. 36. Follow BambooHR and PayScale on social media: bamboohr.com/blog | payscale.com Thank you!
  37. 37. Questions? BambooHR Check out ondemand videos for Elevate at https://www.bamboohr.com/elevate/ Download our free ebook Turnover: The Good, The Bad, and The Ugly at http://resources.payscale.com/hr-whitepaper-turnover-the-good-the-bad- and-the-ugly.html PayScale

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