Training costs less than attrition.
Employee Benefit News released an article yesterday (April 18, 2017) by Rachel Carlson and Jonathan Finkelstein showing evidence for “how employer loyalty is at an all-time low…and how Millennials, who form the largest part of today’s workforce, will change jobs a whopping 15-20 times over their career… Millennials famously eschew the corporate perks that cultivated “loyalty” among their predecessors, but they clamor for education as a benefit.” (Read article here.)
Training is seen as a perk rather than a ticket to another job.
Virgin founder Richard Branson is quoted as saying, “Train people well enough so they can leave; treat them well enough so they don’t want to.”
SHRM’s compelling statistics further make a case for leadership development: Only 15% of an employee’s career success is the result of expertise. 85% is the result of interpersonal skills. This can be attributed to managers who know how to engage their employees AND hold accountable those direct reports who are disengaging others. After all, Saratoga Institute offered 80% of turnover is related to unsatisfactory relationships with the boss.
So, how else do you save money by investing in managers who contribute to employee engagement?
Gallup’s Management Journal’s Employee Engagement Index (Dr. James Harter, Chief Scientist at Gallup, 2016):
- Truly Engaged at 32% – those that work with passion and feel a connection to their company.
- Not Engaged at 50% – those that have essentially “checked out”; putting time but not energy into their jobs.
- Actively Disengaged at 18.% – those that are not just unhappy at work, but also busy acting out their unhappiness while at work.
This alone impacts incredible savings when you consider their research also shows that an engaged workforce has: 1) 44% lower turnover, 2) generates 33% higher profits, 3) operates at 50% higher productivity, 4) enjoys a 50% safer environment and 5) scores 56% higher in customer loyalty.
Real life example: If you have a manager who is not holding accountable a direct report who is disengaging others, you’ve got a leadership crisis on your hands. If you are that manager, it may be that you either need leadership development or a refresher course in leadership development. Engagement is all about relationships, as is leadership.