The Costs of Employee Turnover

turnoverYou have heard time and time again how much it costs to replace good employees. I would argue it costs more to replace bad employees that you shouldn’t have hired in the first place, but that’s a different post. The truth is that there is nothing more exciting that having all the right people on the bus sitting in the right seats, and conversely there is nothing more demoralizing than losing a member of a team and having to replace them. Not only do you lose momentum but you lose money too! It actually costs you money to replace employees.

Dr. Kim Ruyle, hosted a webcast on this subject for members of SHRM a national society of Human Resource professionals. In his presentation, he explained that while costs may vary in replacing an employee. To calculate the true costs, you must consider the following variables:

Costs to off-board current employee
+
Costs-per-hire for replacement
+
Transition costs, including opportunity costs, training, loss revenue until full performance is reached
+
Costs from long-term disruption of talent pipeline

To be less scientific about it, the estimate to replace an average employee is 6-9 months’ salary in recruiting and training alone. So picture this, you hire a manager at $50,000 per year, if you fail to engage, grow, and connect with that manager, it will cost you $37,500 to replace them plus the salary of the new hire and loss of income from the turnover.

Are you starting to see the tangible value of developing your culture and your personnel? This cost is exponentially higher when we are talking about losing key employee or position that require special skills. Paige Robinson, Founder and CEO of Will Reed Jobs says, “Replacing talent is expensive and extremely disruptive. Companies are faced with the costs of talent acquisition, as well as, the loss of momentum on key projects. There is rarely a good time for a company to lose key personnel.”

So what can you do to keep good employees? I think there are 3 fundamentals that cause employees to want to stay. These are assuming you have the basic standards met. Example: You have to be competitive in benefits. You cannot create a culture of loyalty and lasting relationships if your people are being under-provided for based on the market value of their skill or talent. Assuming that the compensation package you offer is in line with your employees’’ skills, there are other ways to make your employees want to “stay put”.

  1. Stop assuming they are going to leave you. I see this a lot, where an employer acts off what they assume to be true. “Well, these millennials change jobs almost every 18 months so I should not invest too heavily in them because then I’ll be training my competition.” Listen, I’m sorry you’ve been burned before. This mentality generally comes honest to a boss that invested heavily in someone that burned them, but this thought process is a self-fulfilling prophecy.   When you assume employees are going to leave you, then don’t invest in their long-term success, the employees feel that you aren’t investing in their future with your company, so they leave to find someone who will put faith in them. If you are start giving people the benefit of the doubt, you will for sure get burned, but you will also find and the cream of the crop this way.
  2. Set a path. It doesn’t matter how small or large your company is, employees need to be able to see where they can go. I know the corporate ladder analogy comes with a negative connotation but it has positives too. Employees, especially Millennials, are competitive with themselves and extremely goal-oriented. Show them from the beginning what growth within your company looks like. Show them that with hard work, experience, and time they can get from point A to B then to C, D, E, and F. They need to feel like they always have a chance to achieve something better. For goodness sakes please don’t say things like, “Well you gotta earn your keep before you can advance in this company!” No one is asking for a handout or to skip in line, the next generation employees just want to know if they perform that will you honor your word and allow them to climb the ladder? The great thing about this new generation is that they actually work harder longer if they have something to work toward.   Dangle the carrot.
  3. Show their vision and impact. I told a story of a deckhand that shoveled coal into the engine of steam boat at a leadership summit we held in Mobile, AL earlier this year. The jest of the story is that his job boring, hot and overall pretty terrible, but at the end of the trip the captain calls him up to the bridge and looking out at the dock said this, “Look what you’ve done. Because you were willing to shovel all that coal we made it here safely, and all these families have been reunited. All that cargo for all those businesses made it here and created even more jobs in the community. None of this would have been possible if you weren’t willing and able to shovel that coal.” How do you think that employee felt then? Energized? Appreciated? Loyal? You bet your BB  Q sandwich he did and the same is true for your company. Your employees that aren’t on the front line need to see the impact and the long-term vision they are sweating for. Show them what the company they work for stands for and promise them that if they stay they will be part of the change you are determined to make.

Some companies spend time and resources on planning to replace employees that leave. What if instead that time and budget was spent to create bonds with the current workforce so they don’t want to leave. Starting acting like employees will stay long-term and stop treating them like temporary desk occupants, give them a path to success and a picture of what their future can be, and show how the company vision makes an impact coupled with your sincere appreciation for their hard work. Not only will your company culture improve but these warm fuzzies will reduce your turnover and actually save you money.

calebCaleb Bagwell/Employee Education Specialist
John Maxwell Certified Leadership Coach
Grinkmeyer Leonard Financial
Toll-Free: 866.695.5162 / Office: 205.970.9088 
1950 Stonegate Drive / Suite 275 / Birmingham, AL 35242
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Leaders Walk

Cambodia 2010 009.JPGIn November of 2015 I had the honor and pleasure to serve the Lord and a local mission organization called NeverThirst through a short-term mission trip to the country of Cambodia. Cambodia is a country about the size of the state of Alabama nestled between Vietnam and Thailand. It has a horrific recent history having been though a largely unknown genocide in the 1970s. During five years of terror, the Khmer Rouge killed almost 2 million people of the 8 million residents targeting anyone educated, religious, or with glasses. The results left a country broken and tormented by their past and in desperate need of the Gospel and leadership. Nearly half the country today is 30-years-old or younger and many of them have lost hope of the country ever fully recovering. But God.

I love that phrase from the Bible because it usually follows some terrible news and then transitions to “But God”. With those two sweet words, the story always yields a new result of how great He can make everything.

malachiWhile I was in Cambodia, I had the chance to meet with many leaders and pastors who truly showed me what a servant leader really was. Today I want to share you the stories of 2 men I met who taught me invaluable lessons on leadership and life. Malachi is a tuk tuk driver (tuk tuk is a Cambodian motorcycle taxi) in the city of Phnom Penh and he is a pastor on the weekends. The village he pastors for is 120 km away or about 2 hours by motorcycle. He wore sandals as almost everyone there does and he rides his bike (when it is working) every Saturday to the village, stays overnight, preaches and stays with the people on Sunday. Monday, he then drives back to the city for “work”. He told us how his bike is old and it doesn’t always work and frequently quits on his long drive to and from the village. I asked him what he did when his bike breaks down? He told me, “I walk if I’m close enough, hitchhike (not recommended in Cambodia), find a mechanic and barter with whatever I have. The village’s need is bigger than my obstacle”. Are you kidding me? This man receives nothing from his time in the village that we can see but he does receive the joy from obedience to Christ. Malachi taught me that leaders recognize that the need of their teams is greater than the obstacle in their way. Malachi is changing lives through his preaching and teaching along with challenging his people to start growing more crops and raising chicken and pigs to produce income instead of relying totally on rice.   The people follow him because he is absolutely mind-heart-body committed to being a servant.

Think through that. He never let an obstacle keep him from his service, his commitment is seen and felt by his people, his motives are pure, and his reason for leading is Divinely given. We can learn much about leading our teams and companies from Malachi. Keep reading though because I have another inspiring gentleman I came to know in Cambodia.

lwPastor Chiamen was another leader in another part of Cambodia that taught me about leadership. Pastor C was preacher, farmer, school principal, caregiver to his mother and served the people of his village daily. Pastor C let us stay in his school while we were building bio sand filter with the NeverThirst local partners. One night after dinner Pastor C announced to me, “Let’s go”. When I asked where we were going, he responded simply, ”prayer walk” I probed him needing to know exactly what a prayer walk was. He explained, “We walk and we ask people what they need us to pray about.” Before I could even ask the question, he answered it for me, “We ask any people we see.” With a lump in my throat and my heart overwhelmed we started walking. How simple yet how amazingly impactful of a concept. How can we know how to serve people if we aren’t asking them what they need?

Can you imagine the impact of walking through your office asking people what you can do for them? Do you have what you need? Are you happy?   Is there anything you can do to help them succeed?

What a concept as a leader to value you people enough to GO TO THEM!!! Sure you can have an open door policy, but this concept is not at all the same. This is about you going to them. Go to their office door or cubicle or job site and earnestly requesting an opportunity to help them. Pastor C lead us through a village and down a railroad track at dusk. We prayed with and for people along our walk. Pastor C was showing me being a leader means so much more than our culture lends. It means taking care of the flock you are leading.

walk2

I went to Cambodia to help build wells for clean water and show others that God’s love is worth obedience. In return I took home wisdom that leaders serve at all cost, leaders care for others above themselves, and when there is no other way to get to their people, leaders will find a way and maybe even have to walk.

calebCaleb Bagwell/Employee Education Specialist
John Maxwell Certified Leadership Coach
Grinkmeyer Leonard Financial
Toll-Free: 866.695.5162 / Office: 205.970.9088 
1950 Stonegate Drive / Suite 275 / Birmingham, AL 35242
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Motivated Monday {March 28, 2016}

Don’t get caught making a big decision based on spur-of-the-moment emotions.  Make big decisions way ahead of time.

calebCaleb Bagwell/Employee Education Specialist
John Maxwell Certified Leadership Coach
Grinkmeyer Leonard Financial
Toll-Free: 866.695.5162 / Office: 205.970.9088 
1950 Stonegate Drive / Suite 275 / Birmingham, AL 35242
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The Millennial Mindset – Bridging the Gap

mindsetI am member of the largest, most misunderstood generation this country has ever seen.   Millennials are different than our predecessor generations. We expect a lot from people and from companies.   The stereotype for us is that we addictively play video games and we bounce jobs like we don’t know where we are going or what we want.  We are painted as entitled, lazy, and “know-it-all’s”. And if you are a Millennial, you will read that and cringe because you don’t like how you are automatically portrayed; but you will also personally know of people your age who behave exactly just that way. Let’s face it. 90% of Millennials are making the other 10% look bad!

The reality for many “baby boomer” business owners is that the Millennials are in line to inherit the next generation of your businesses.   That means the company you own or work for right now might be run by one of those nitwit 20-30 somethings in the next 10-20 years. Consider that for a moment, the youngest baby boomer will turn 65 in 2029, that’s only 13 years away.

The issue for management is two-fold.

  1. How do employers attract the 10% of Millennials that are already on the right path?
  2. How do companies create a culture that can motivate their other Millennials (the 90%) to live up to their potential?

Education for both groups is paramount.   Improving communication to allow for real collaboration between a multi-generational workforce will mean ultimately the success or failure of many companies over the next 10 years.   Human Resource departments have to address these issues in now in 2016 not 2020 and certainly not 2029.

Three ideas Millennials want you to know about them.

  1. Look backwards: To better understand this younger generation, consider the environment they grew up in. Author of the book Sticking Points, Hayden Shaw, calls this history “Ghost Stories”. On September 11, 2001, I was sitting in 9th grade Spanish Class when a teacher ripped open our door and frantically yelled at my teacher, “We’ve been attacked in New York.” We watched as our country mourned and then rallied together and, if only for a moment, that sense of community was immensely strong and it stuck with us in a profound way. While still in our formative years, our nation endured what is the worst attack against the country ever and we had to figure out what to take away from it.   We were taught as kids to expect a toy in every meal, have never known anything but technology growing and regrowing every 12-18 months.   New technology gets us incredibly excited but outdated technology is disproportionately more upsetting. We watched our country’s economy grow by leaps and bounds through the 90’s only to graduate from college in 2008 and watch hundreds of companies’ layoff hundreds of thousands of people each month. In that recession, there was no loyalty. Loyalty cost money and companies literally couldn’t afford loyalty. We saw that. We made note of it.   We watched our parents, our aunts, uncles, and our parents’ friends get laid off after years of service for their companies. Now, don’t get mad yet, I’m not bashing companies for doing what they needed to do to survive but I’m trying to get you to see that our lack of loyalty was born from what we learned about employers and companies during the breakdown in 2008. We are the first generation with helicopter moms and participation trophies. We were literally programmed to believe that we deserve more and to not be afraid to ask for it.  So when we want more, we do just that.
  2. Learn to speak our language: We may use the same words as everyone else but we certainly have our own language. Communication is not the same now as it was for most baby boomers when they entered the workforce. Millennials require a bit of finesse. Have you ever heard the saying, “Say no by saying yes”? This was a phrase taught to me in my first sales training class in Houston, TX. The concept is that when someone asks you for something that you cannot, or will not give them, you counter their request by offering something that you are willing to do instead of just saying no. Just because we are needy and feel entitled to ask for too much too soon does not mean that you have to comply, but instead of saying a flat “No”; what if you said it a different way? Now if something is company policy then you should not be expected to bend those rules, but I will challenge you with this. If you are going to play the card, “It’s company policy”, you should know why that is the policy. Is the company actually better off because of that policy or is that just way it has always been done? You can count on the fact that the Millennial employee is going to ask, “Why?” Let’s look at an example. One hot topic recently has been a flexible work schedule/environment. While there is lots of data that shows flexible work hours increase productivity, let’s just assume that your company can not comply with this request. Instead of giving a flat NO to the request, what if you said, “That’s an interesting question and I’ve been asked about it a few times now. Would you be willing to put together some data for me on how that might look logistically for everyone? Build a case and let’s look at it together. I can’t promise anything because we’ve never done this before but I’m willing to look into it.” This doesn’t hold you liable for anything and you might be surprised by what you learn, but ultimately you have allowed them to figure out how it will or will not work on their own. It is just as likely as not that they are going to realize the “Why” during their research and accept that it will not work OR worst case scenario, they figure out how it could work and it increases your productivity, morale and rapport with all employees.   Now, if you are a boss that thinks, “Whatever I say goes and they need to deal with it”, I would be willing to bet you have high turnover, low employee morale, and probably no loyalty in your workforce. You may have to step out of your comfort zone to learn to speak our “language” but the benefits are immeasurable when you consider what it means if you don’t.
  3. Mentor Us: Millennials have what I call “Google Syndrome”. You call it being a “know-it-all”, but it’s the same thing. I timed myself, and in 90 seconds I learned the circumference of the Earth (24,901 miles), the number one sales tip by New York Times, “It’s not what you say, it’s what your customer believes”, I learned the weather forecast for the next 10 days and I learned quite a bit about the best commercial doors you can put in a school for both safety and quality. Between Google and Millennials, we literally do know almost everything. The problem is getting us to see that knowledge does not equal ability. I know how to lift 500 pounds, I’ve watched a video on proper form, but I still cannot lift 500 lbs. Your Millennials need a mentor. They need someone who is willing to harness their enthusiasm and energy and direct it through wisdom. Wisdom = knowledge + experience. Walk softly here though. Be careful to not belittle us. If you are going to breakthrough to a Millennial, you cannot treat them like a kid and say things like, “Just because you read an article on how to do this doesn’t mean you can do it. That takes experience.”  Our mental response is very likely to be, “Well get out of the way and let me try it!” Those failures are ugly. They get lots of press in large companies and do no good.   Instead, set up some opportunities for “controlled fails”.   You are right that we probably can’t do something but at least we read the article, at least we tried to learn.   Don’t kill that enthusiasm, direct it. If you start looking at your workforce as a group of mentees and not employees, you will go much further.

We aren’t as bad as you think and you will need to figure out how to engage us soon if you haven’t already. As a self-proclaimed ambassador for my generation, I promise I’m going to work my hardest to kick us into a new gear. If you are willing to work to attract, harness, and communicate with Millennials, your company will have an almost endless supply of innovation and energy that when guided correctly will literally change the world!

calebCaleb Bagwell/Employee Education Specialist
John Maxwell Certified Leadership Coach
Grinkmeyer Leonard Financial
Toll-Free: 866.695.5162 / Office: 205.970.9088 
1950 Stonegate Drive / Suite 275 / Birmingham, AL 35242
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The Details

This may not be the best blog I’ve ever written from a content prospective but it’s definitely my favorite so far. As I am typing, I am on the beach in a chair with beautiful view and stack of books that I have been dying to finish.

detailsToday I am overwhelmingly impressed with the hotel that we are staying in Rosemary Beach, FL. The Pearl Hotel is a wonderful place to stay and their attention to detail is impeccable. This experience has got me thinking. What if we as employees and business owners treated all of our clients/customers as if we were in the hospitality industry? Example, Jared, one of the hotel’s wait staff met us on the first day. From the first meeting, he has remembered my name and greeted us on every occasion always ending the conversation with, “If there is anything I can do to make your stay better, please don’t hesitate to let me know.” When was the last time we went out of our way to make our clients feel appreciated? When was the last time we asked our clients, our employees, our colleagues, “If there is anything I can do for you, please don’t hesitate to let me know”?

Why do hotels, really nice hotels, exert so much effort on the little things? Jared remembering my name, the housekeeping writing notes to us, thanking us for our business, having sunscreen available to us and water by the pool and on the beach are all things that have made this hotel stick out above most every hotel I have ever stayed at and think about the cost for the hotel to provide that sort of service:

0 dollars to remember my name

50 cents for the note card in my room (maybe!)

3 dollars for sunscreen by the pool

But those are the things I remember most not because they are expensive or luxurious but because it showed me they care enough to think about the little things.

So if you have a client that you get coffee with often, how hard would it be to write down their order and show up a few minutes early next time to have it ready for them when they arrive? If your employees all work outside, how easy would it be to go buy them all sunscreen, obviously the spray kind because no construction worker is putting lotion on their hands! How easy would it be to make sure that everyone in your office has a list with pictures if possible of every client coming into your office each day so as they walk in every single member greets them, BY NAME!!!

I have heard over and over again, Your people are your most valuable resource but that’s wrong. They are you second most valuable resource. The most valuable resource to any company is the consumer that pays for your product or service. If they all go away, then having all the best people in the world won’t matter. Now keep in mind, this type of environment, this dedication to details and over-the-top treatment of clients has to, let me repeat, HAS TO start at the top. If you are not caring and treating your employees with this level of respect, it is unlikely they will treat your customers that way. So this is a challenge or a charge really to put forth more effort, focus on the little things from owner to the new hire and let’s pretend that our companies actually depend on the people we have the privilege to service…BECAUSE THEY DO!

calebCaleb Bagwell/Employee Education Specialist
John Maxwell Certified Leadership Coach
Grinkmeyer Leonard Financial
Toll-Free: 866.695.5162 / Office: 205.970.9088 
1950 Stonegate Drive / Suite 275 / Birmingham, AL 35242
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Motivated Monday {March 21, 2016}

#‎Motivatedmonday‬ today talks about John C. Maxwell and his ideas on our actions versus our intentions. This is also my first video post my conference last week completing my John Maxwell Certification.

calebCaleb Bagwell/Employee Education Specialist
John Maxwell Certified Leadership Coach
Grinkmeyer Leonard Financial
Toll-Free: 866.695.5162 / Office: 205.970.9088 
1950 Stonegate Drive / Suite 275 / Birmingham, AL 35242
Contact Caleb

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Developing The Human Resource

dev hrNo, I do not mean the HR department. I literally mean the Human as a Resource. I recently read a quote from a Fortune 100 CEO that said, “Everyone is trying to come up with the right plan, the right plan to grow and prosper, but truth is there are 100 different plans, all of which could work. It’s not the plan that matters as much as the people! We have to get the right people and give them what they need if we are going to succeed.” I have the very distinct pleasure to work with HR professionals on a regular basis and after several years of working with them, all across the southeast, I am concerned that for many companies the HR department has been transformed into a crisis management and staffing department and not what it could or should be.

As companies grow it seems their HR teams get so bogged down with the requirements of keeping the firm running that they no longer have time to actually develop their second most valuable resource, the people working there! Checkout the blog post “The Details” to hear what the number one most valuable resource is. We work for a lot of companies that say, “We went to bed small and woke up big.” They feel kind of like Tom Hanks in that movie BIG. They wish and wish and wish then instead of going home they put their nose to the grind stone.   They hustle for years and then when they look up they are big! I had one CEO owner say in a 401(k) review meeting, “Wait! We have 104 employees? Since when? Geez I guess were not so mom and pop anymore.”

This is happening all over. Companies are growing so fast that HR professionals are having to work like staffing and benefits firms and not like developers of the human resources (employees) and I have stats to prove it! NERD ALERT! Sorry but you should’ve known that you were not getting through an entire post without some nerdy stats. In a Harvard Business Review study from 2015, 61% of over 2900 company leaders’ interviewed said that Training and Developing was one of the most important tasks required of their HR departments, but when those same leaders were asked to rank HR job tasks in order of priority, Training and Development came in 11 out of 16!! Anybody see a problem here? Above that when the same study ranked above-average companies in growth, it recognized they were all engaged in some type of training and development program.

This is what I want you to think about today. If we acknowledge that training and developing your Human Resources is so important, but we also see that most HR teams are too busy or pulled in too many different directions to implement the needed T&D, then we have presumptively left it up to our new hires to “better themselves”. Effectively, this means two things, both of which are problematic for employers.

  1. By skimping on training and developing your employees, you are saying to them, “We are not invested in your long-term success. We needed a widget builder today. We will see if we need a widget manager tomorrow and maybe you’re the girl. We’ll see.”   You are demotivating them by communicating that you don’t have a long-term plan for them as employees. What they need to hear from you is that you appreciate what they are doing and you want to give them ways to grow within YOUR company.
  2. It leaves employees then to their own devices. Not all of your employees want to be the widget manager or even Widget CEO, but the ones that do are the ones that you want around for a long time. If they are not offered ways to get better at work, they will look for ways to get better elsewhere and the side-effect of that can be decreased loyalty. I know this sounds bad and stereotypical but it’s true and I can say it because I am referring to your Millennials and I am one. – I was 3 when BIG came out!

the-big-piano-at-fao-schwarz.jpgSo as we grow, it is easy to push training and development of your employees down below hiring and crisis management, but I fear that is a self-fulfilling prophecy. Lack of training and development leads to higher turnover rates, which leads to the need for more hiring. Untrained employees lead to more crisis which take more HR time in crisis management and on and on and on. In conclusion, we know that this does apply to all companies, in fact, I know some companies that read this probably only have a one-person HR team and they may conveniently also be the owner, but it’s time to focus again on Human Resource – the individuals.  You have challenges today that your predecessors did not have, having 10,000 millennials entering the work force every day, but you also have a beautiful opportunity so take advantage of it. Mine your resources. Protect them. Value them.

calebCaleb Bagwell/Employee Education Specialist
John Maxwell Certified Leadership Coach
Grinkmeyer Leonard Financial
Toll-Free: 866.695.5162 / Office: 205.970.9088 
1950 Stonegate Drive / Suite 275 / Birmingham, AL 35242
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Motivated Monday – {March 6, 2016}

Video

How often do stop and think about what you say before you say it? Better yet, how often you stop and think about how you are about to say something before you say it? Communicate in ways that inspire and uplift not stifle and discourage.