Best Practices in Managing Employee Turnover

Jennifer Ferris, CCPSr. Compensation Professional

Mykkah Herner, MA, CCPDirector of ISX Services

www.payscale.com

Ivan HurttS 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 HernerM 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

A Changed Perspective

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

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

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

• Workforce competency and skills gap

• Increased competition

• Globalization

• Culture

• Competition for talent

• Stresses on work-life balance

• Etc.

Additional Dynamics

–Bersin by Deloitte

–Ram Charan Best-selling Author, World-renowned Business Advisor

Defining and Quantifying Turnover

the rate at which people leave a place, company, etc., and are replaced by

others

Good Turnover vs. Bad Turnover

Add good complexity

Low Performer

High Performer

VoluntaryInvoluntary

Retention is Still a Major Concern

PayScale 2016 CBPR

Retention Compensation

Recruitment

Engagement

Development

Common Myths of Employee Turnover

Turnover is Always Bad

http://lolsheaven.com/

Turnover is bad for morale

Image: https://www.funergizers.com/3-Massive-Mistakes-Which-Lead-to-Low-Staff-Morale

We can predict turnover based on generation

Turnover is alwaystime-consuming and costly

The Role of Corporate Culture in Turnover

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

"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. BreitfelderHBR: “Why did we ever go into HR”

BusinessValue

H

L

Strategic

Operational

Micro Small Mid Large

HR viewed as a cost centerTransactional HR High-Impact HR

HR as a strategic investment

Evolution of HR

BusinessValue

H

L

Strategic

Operational

Micro Small Mid Large

Evolution of HR

HR viewed as a cost centerTransactional HR High-Impact HR

HR as a strategic investment

Understand your true worthas a strategic necessity

Eliminate the unnecessaryshed all the dead weight

Organize your informationto lay a foundation for insight

Automate the operationalset yourself free to do great work

Maximize business valuealign activities to strategic outcomes

Solve meaningful problemslearn to think, act, and win like a business.

Measure and reportthe value and impact of your work

ESCAPE ELEVATE

The Impact of Turnover on your

Business

• Morale• Engagement• Performance• Training• Knowledge retention• Nimble to market changes• Cost to replace

http://www.corporatelearningnetwork.com/

Setting Your Comp Plan Up for Success

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

What is the right compensation mix for my org?

Compensation Strategy

Talent Market(s)

Industry Size

Location Org type

Level of competitiveness

How aggressively

to pay

What to reward

Performance, Experience,

etc

How do organizations use variable pay?

15.8% 18.1%

61.8%

25.7%40.0%

14.4%

PayScale 2016 CBPR

Recruitment and Retention Plans

Merit-base

d pay plan

Non-discretionary

incentive

based pay p

lan

Discretionary

bonus plan

Stock option/g

rant plan

Learning and developmental o

pportunities

More perks-gym

membersh

ips, ca

tered lunch

, etc

Other (please

specif

y)0.0%

10.0%20.0%30.0%40.0%50.0%60.0%70.0%

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

“I found a salary

report on the

internet and it says

I should be paid

more…”

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?

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Thank you!

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 athttp://resources.payscale.com/hr-whitepaper-turnover-the-good-the-bad-

and-the-ugly.html

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