What’s the churn of your company? - Emerge UK
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What’s the churn of your company?

Have you heard that term – ‘churn’? It’s commonly used by recruiters when referring to the retention of new staff. If 100 people have been recruited for a company’s new branch/department, for example, and within the first couple of months, a third of the newbies leave, it would be fair to say that that business has a high churn. Let’s face it, realistically…what can anyone really know about a new role in the first few weeks? Probably not enough to make an informed judgement, so whatever makes an employee uproot all over again so soon must mean something is fundamentally wrong.

Of course, it’s a two-way street: it could just as easily be the employee’s expectations and exaggeration of their abilities that sees them leave – and little to attribute to the company as to why they move on before they’ve got comfy. But imagine if it is the company’s fault…it needs highlighting and addressing. The huge cost to the business of both time and money, associated with recruiting so many employees ‘again’, makes it an issue that’s hard to ignore.

The firm Korn Ferry recently surveyed a number of executives, and found that a staggering 90% admitted that they suffered from ‘churn’ to some level. From the responses Korn Ferry gathered, they were able to show that churn quotas commonly range from 10% of new hires to a whopping 25% (and we were sensationalising our point by using 33.3% in our example – we didn’t realise we’d be so near the truth!).

Is there a big enough talent pool in every industry to choose the cream of the crop, knowing that, only weeks later, you’ll be back at the pool once again? How can companies sustain ongoing recruitment cost levels? Even if it’s down to individual employees and their expectations, why is there so much room for misinterpretation during recruitment processes?

The latter is the reason most cited in Korn Ferry’s survey: expectations veer wildly from what is promised, described or promoted by a company to the new employee’s actual experience once they get there. Reasons for their disappointment/unhappiness can involve challenging aspects of a practical kind, to unrealistic expectations and subsequent pressure from their leaders/managers, and also problems within a company’s culture.

The first one, issues of a practical kind, is the easiest to combat. Ask those already doing the job, or the outgoing employee(s) before recruitment starts, to detail what actually happens, and is required, in the role on a day-to-day basis. Be objective about the position and what you’re asking your new employees to do – is it realistic? Do targets need adjusting? Is there enough on-the-job training and support in place once a new employee starts, to properly ingrain them into the team and company?

Then look at your leaders and managers. Do they motivate and inspire new staff, or just leave them to it? Do they have an understanding of the role themselves, so that they’d know how to support a beginner, if necessary? Do they have the right level of ‘soft’ skills to make the new starter feel part of the team? If you can’t answer these with confidence, then investing in leadership training is a much cheaper alternative to continuous churn – and if you don’t believe a leader could make that difference, read this post.

Then we come to the last consideration: a company’s culture. This is a biggie, and something that’s much harder to address or overhaul than the tweaking of a job description.

The culture of a company can incorporate the following (as well as much, much more):

  • ~ Policy and procedures
  • ~ In-work schemes and benefits
  • ~ The company’s attitude to training and development
  • ~ A company’s approach to innovation
  • ~ The company’s hierarchy and structure
  • ~ The morale of the employees, and the level at which they feel valued/that they make a difference to the company by coming to work
  • ~ Pay levels
  • ~ The company’s approach to their customers, stakeholders and suppliers
  • ~ How well they treat their staff and the level of respect demonstrated to all employees throughout the company
  • ~ How well the company can define its culture, and who it recruits in accordance to this
  • ~ How the company instils its values and mission in staff; why it does what it does
  • ~ Physical environment
  • ~ How much it encourages feedback, ideas and innovation from its staff, and how much freedom it affords them to make decisions on their own
  • ~ How the company promotes teamwork, as well as individual effort; its reward structure
  • ~ Its framework for complaints and grievances
  • ~ Where the company is heading, strategically, and how transparent this is to employees

We’re sure we could produce more, given a little time. Perhaps you can see why affecting a cultural change isn’t instantaneous. And we’re sure you’ll be able to picture how – if some of the items on this list are out of balance, or a firm negative – it could make a new hire believe the reality is quite different to the picture the recruiter painted. Korn Ferry’s survey showed a fifth of new hires blame the company’s culture as their reason to leave. That’s significant.

We’re not suggesting it’s easy, nor that any company gets everything right. But Google the recruitment process and company culture of a firm like Zappos (the shoe company), and you’ll see why they enjoy a low churn of new recruits, despite offering them money to resign!

Emerge can help your company with any of the issues in this post. Whether your business will benefit from support with an organisational/cultural change; leadership and management training; a change of company structure; or induction coaching and support for new employees – this is just a snapshot of what we could do to help you take control your ‘churn’. Call 01329 820580 or email us via info@emergeuk.com.

Thank you to Stuart Miles at freedigitalphotos.net for use of the image.

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