The Vicious Circle of Turnover

“Square pegs don’t fit into round holes, but managers keep pounding away at their people, until something breaks. Then they hire someone new, and start all over again.”

Does this sound familiar to you? Most of us have been that square peg at some point in our careers. Some of us have also been the manager in this scenario. However you relate to it, it is a scenario that plays out all too often in businesses both large and small. Someone is hired who isn’t a fit for the position. All the manager can see is what’s wrong with this employee, and proceeds to try to fix and change them. Eventually, the employee leaves, either voluntarily or involuntarily, because they weren’t a fit for the position to begin with. Over time, this takes a toll on the organization. As the poor hiring continues, the manager already knows that the chances of the new hire sticking around and being successful are nil, so why bother investing your blood sweat and tears in developing someone who won’t make it anyway?

This is the Vicious Circle of Turnover. It is more extreme in some industries and businesses than in others, but the signs are obvious: high turnover and resignation about solving the problem. Why would a business resign itself to operate in this manner? There are three reasons I’ll explore here. The first two are related. Number one is that the business doesn’t understand the true cost of their turnover. The second, which follows naturally from the first, is that they simply don’t value their people. For these businesses, people are disposable, a dime a dozen, so to speak. If it only costs $400 to replace that salesperson, why not just hire them en masse, provide a couple days of training, and see who sticks to the wall? Hard to believe? I’ve actually worked for a company who operates in this exact manner. The salespeople who have been around resent the new people, and treat them as though they won’t last. The new salespeople don’t like the working environment, and move on if they aren’t finding sufficient fulfillment in other aspects of the job. The management makes it clear that if you don’t like it, you’re free to move on.

So what is the true cost of turnover? Others have covered that ground in depth. If you want a full and detailed picture of the actual costs, just do a search of “employee turnover costs” on Google, and you will be stunned by the information and statistics available. I usually quote that a bad hire in a $10/hour position will cost a business around $5000.  Suffice it to say, it is far more costly than most businesses estimate, in both dollars and morale.

This leads to the third reason why businesses continue to operate in this manner. They don’t know how to break the cycle. Many businesses with enlightened leadership who truly value their people as human capital still suffer from the Vicious Circle of Turnover. It’s likely a nicer version than the one I described above, but it is no less costly. It only takes one or two bad hires to get the cycle going, and once you’re in it, it isn’t easy to see the way out, because we already know how employees are.

There is a way out, though. Change the context of how you perceive your employees. Invest in your human capital, starting with the hiring process. Read the Dale Dauten book I referenced in my earlier post, “Great Employees Only: How Gifted Bosses Hire and De-Hire Their Way to Success”. Start hiring for behavior, rather than skills. Skills are teachable and trainable, most adults’ behavior is fixed. You can hardly impact your own behaviors (the things you try to fix and change about yourself), much less the behavior of others.  Find a behavioral assessment tool you like, learn it and use it, or delegate that task to someone in your organization who would be better suited to implementing it. Those square pegs won’t fit into the round holes no matter how much you pound, so why not hire some round pegs, and free your business from the Vicious Circle of Turnover.

3 thoughts on “The Vicious Circle of Turnover

  1. Pingback: Transforming Performance Reviews « Capitalizing On Your Strengths

  2. Pingback: The True Cost of Employee Turnover : Jumpstart:HR – Strategic Human Resources Consulting and Outsourcing Service Provider for Small to Medium Sized Organizations

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