As we continue to get unpleasant economic news and predictions, more and more leaders and organizations are starting to think seriously about the actions they can take to be more financially resilient in the coming year. I have written before about how and why diversity and inclusion represent great value to organi..., and if anything our new economic terrain only magnifies this value. To a large degree, diversity and inclusion efforts are about the efficient identification, management and deployment of available resources (talent, ideas, relationships, etc.), and it is critical that we be efficient today. Efficiency is always important but becomes a matter of survival in times of layoffs, tight credit, sluggish markets and financial uncertainty.

In 2007, the Corporate Leavers Survey was released by the Level Playing Field Institute, and it showed that each year more than 2 million professionals and managers voluntarily leave their jobs due to unfairness…at a cost to employers of $64 billion annually. $64 billion is real money. Just as there are generally racial disparities in retention rates, there are also disparities among those that leave their jobs due to unfairness. Persons of color are more than three times more likely to leave solely due to unfairness in the workplace. So we have a great opportunity to protect our bottom line by creating and supporting healthy and inclusive cultures.

This report from the Center for American Progress Action Fund shows that due to gender pay inequity the difference between the median wages of all full-time working men and women over a 40 year period — deprives women of $434,000, on average, over the course of their working life. According to the research and advocacy organization, Catalyst, women represent half of all managers and professionals in the workforce, yet their leadership representation has dwindled from 16.4% of humble 2% of these positions.

So…when it comes to having organizational cultures that are inclusive and able to truly identify, integrate and reward talent there is still a great deal of room for progress. Make sure that your organizational culture, your practices and policies are not pushing some of your talent out the door. To more efficiently retain your workforce and get more for what you are spending, a few suggestions:

* Look for disparities in your workforce. If there are demographic cohorts that are under or over represented in your workforce, or in management, promotions, retention rates, etc. …be concerned. Something is causing it. It may or may not have anything to do with any intentional efforts…but something is causing it. Do not accept conventional wisdom answers that are not connected to any real data regarding the causes or reasons for these disparities…those answers are often assumptions based on stereotypical ideas and images.

* Give more power to the people. Diffuse power in your organization by putting more planning, policy review, budgeting, and decision making in the hands of groups of employees. The actual value of management as we have come to know it is greatly overrated, and generally is more constraining than empowering. Give people access to real data, give them real decision making ability (and accountability) and you will end up with better results.

* Be rigorous in your collection of exit data. Many of the organizations that I have worked with are not terribly focused on collecting good exit data when employees leave. This is unfortunate, because this data can prove to be very valuable. Make sure that you have a solid exit process in place and that a safe and structured exit interview is conducted. And then….make sure that information gets used.

* Train your managers. Train your managers some more. And then train them again. Managers need more support when it comes to the so-called “soft skills.” It needs to be good training and it needs to be on-going. If your management / leadership development program is based more on budgeting and balance sheets than it is on relationships and social dynamics…you lose. If your new managers are not being coached on listening skills, asking questions, dialogue, and group dynamics then you are going to suffer from unnecessary turnover. Train them, support them, coach them and then, reward them for the right things.

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Comment by John Sumser on December 15, 2008 at 9:45pm
Joe,

Great thoughts.

I wonder, though, if efficiency is what you are really after. Efficiency means doing things faster and cheaper while effectiveness means doing the right things. Often (and more than most people acknowledge) retention is the wrong thing.

Certainly you don't want people to leave because they haven't had the best possible performance environment. But, you DO want them to leave if they aren't superior performers. You may even want them to leave if they are really good performers but have been in their jobs too long (you might want to shift them into something they know less about).

Retention, in and of itself, is more likely to result in bureaucratic organizations full of people who have been there too long. Keeping the organization in a state of renewal just might involve making the place a little less friendly.

While I agree that hanging on to really great talent is an important thingto consider, I'm not so sure that anyoneone has a really good definition of what "unnecessary turnover" actually is.

What do you think?
Comment by Joe Gerstandt on December 16, 2008 at 12:34am
Hey John-

Thanks for taking a look at the post and sharing some thoughts. I am in complete agreement that retention in and of itself is not necessarily a good thing and I should have added a couple of points speaking to the difference between good and bad turnover. I think that (just my opinion) you do not want anyone leaving your organization because of unfair or unprofessional treatment...even poor performers that you do not want to retain, should be leaving due to a professional and fair process. If "poor performers" are leaving because of unfair treatment, I am not sure that we can even be confident that they were poor performers...because they were in an unfair context.

I guess I would define unnecessary turnover as turnover that happens when there is a flaw in the system...a breakdown of policy or performance. For example you are going to lose some good people because of decisions that you make about the pay and benefits that you offer, fact of life...unfortunate but necessary. You are also going to lose people who do not meet performance standers...necessary. Unnecessary turnover is when people leave because people and practice do not work the way that you expect them or intend them to work. At least that is what it means in my mind!

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