Leadership Wisdom or Pound Foolish?

As you might imagine,” a prospective client told me the other day, “we’ve eliminated all training because of the economy.”

“It seems to me,” I politely suggested, “that leadership training would be especially critical in these economic times. After all, what company can afford to have unmotivated employees when staffs are already so thin? And what if your best people leave?”

Oh, we’re not worried about employee turnover,” said the HR manager confidently.

I hear that last comment from a growing number of penny-pinching employers these days, and I always have to follow up with, “Why not?” Their various reasons for neglecting to teach their leaders how to hold onto good workers range from tired clichés to utter nonsense.

Here then, in no particular order, are the eight most frequently mentioned excuses companies give for not making employee turnover a priority.


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8 Thoughts: Leadership Wisdom or Pound Foolish?

1. “Our workers have no place else to go.”

Wanna bet? According to the Bureau of Labor Statistics, there are 2.5 million job openings in the United States. Despite the economic downturn, many professional services, education, and healthcare organizations are actively hiring. What’s more, while the overall unemployment rate hovers near 10 percent, only 4.9 percent of people with four-year college degrees are looking for work. So even in this economy, clinging to the we-got-them-where-we-want-themretention strategy is risky.

2. “We’ve always had very low turnover here.”

Uh-huh, and I’ve always had hair. But there’s no guarantee that either condition will last forever. In fact, according to a recent survey, 25 percent of working Americans say they’ll seek new jobs as soon as the economy rebounds. And the stress from losing a quarter of your workforce will have you pulling out your hair.

3. “Our industry is naturally prone to turnover.”

Then it’s likely that your industry also has lots of inexperienced workers, poor customer service, low productivity, and lousy morale. Employee turnover is disruptive to business operations, so finding ways to limit it can give your company an advantage over the competition.

4. “Attrition is healthy for an organization.”

Spoken like a true cost cutter. Nothing helps keep salaries in check like the resignations of some highly paid workers. Unfortunately, departing employees take their knowledge—and often their customers—with them when they go.

5. “Our opinion surveys prove that employees love it here.”

Or do they? As it turns out, 46 percent of companies that conduct workforce surveys ignore the negative issues that their employees raise. How closely are you reading your employees’ responses? What are their answers really telling you?

6. “We can’t afford to pay what it takes to keep good workers.”

On the other hand, maybe you can’t afford not to: Replacing a departing worker costs as much as twice the employee’s salary. By the time you’re done tallying the expenses for recruitment, pre-employment testing, new-hire training, and productivity loss caused by vacancies, focusing on retention is highly economical.

7. “Our turnover rate is lower than it used to be.”

Great, but a sudden decline in voluntary turnover can be a sign of bigger issues at your company. Perhaps a corporate scandal has damaged your firm’s—and thus, your employees’—reputation in the community. Or maybe the fact thatyou’re too cheap to provide training leaves recruiters believing that your workers are unskilled. As one HR expert put it, if companies aren’t trying to pilfer your employees, it’s possible they’re not worth stealing.

8. “We do focus on retention—of our top talent.”

Ah, the top grading, forced ranking, differentiation (whatever you want to call it) approach: identify your A-players and reward them well, and show your C-players to the door. That will help keep the best and brightest on board, right?As it turns out, it’s often your top performers who most resent the heartlessness of ranking systems and leave as a result.

Companies that fail to focus on employee retention are doomed to look up one day and wonder where everyone went. Without a doubt, leadership is vital to retention, and seeing to it that your managers are equipped to lead is a critical retention strategy.

So what’s your excuse?

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George Brymer is author of Vital Integrities and the creator of The Leading from the Heart Workshop®.
He can be reached at george.brymer@allsquareinc.com

Image Sources: i661.photobucket.com, expresshospitality.com

3 responses to “Leadership Wisdom or Pound Foolish?

  1. Not providing training for employees is one of the surest ways of ensuring they’ll move on sooner rather than later. Short sightedness at its worst.


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