63. Plugging A $1 Million Leak In Your Company

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On today's episode...

A trillion dollars.

That’s what US businesses are losing every year due to voluntary turnover. 

But here’s a hard truth for you:  most of this is self-inflicted.

Hey, Team welcome back to Lead Thru Values. This podcast exists to help you ensure that every person on your team has the skills, knowledge and confidence to do their job exceptionally well.

And today, I want to share something I’m seeing in my work companies across a variety of industries and sizes.

Turnover is expensive. According to Gallup the cost of replacing an individual employee can range from one-half to two times the employees annual salary (a very conservative estimate.)

So a company with 100 employees that provides an average salary of $50,000 could have turnover and replacement costs anywhere between $660,000 and $2.6 million per year.

That’s according to the Bureau of Labor Statistics report that measured an annual turnover rate of 26.3%… in 2017. That’s 5 years ago and pre-pandemic.

Losing your best people means you have a leadership performance gap. And there’s no denying it. But, that means it is also fixable.

It would be too easy to say that this is natural or inevitable. 

Yes, people move. Get married. Get divorced.

Some people pursue their own dream to start their own company.

Here are some additional statistics.

• 52% of voluntary exiting employees say their manager or organization could have done something different to prevent them from leaving their job.

It would be easy to assume or say, “we did everything to make it right and keep that person…”

But over half of exiting employees tell that in the 3 months prior to them leaving, neither their manager or any other leader spoke with them about their job satisfaction or future with the company.

Don’t miss that!

In 3 months, nobody asked them how they felt about their job. No one talked with them about their future.

This is the leak that I’m seeing and I want to help you know how to plug it.

You train your managers to have consistent, meaningful conversations with employees.

I train and coach my clients on how to have a real Progress Meeting where a productive, 2-way conversation occurs every 30 days.

Now before you stop listening because you either *think* you’re already doing this, or you can’t stomach the thought of another meeting, stick with me.

Here are 3 keys:

The meeting gets scheduled out a year every 30 days. The goal is that a minimum of 10 meetings occur per calendar year. 

Why is scheduling them ahead of time so vital? Because what’s easy to do is also easy not to do.

Getting them on the calendar creates accountability and an expectation that they’ll happen. All too often this simple step is taken for granted, resulting in gaps of 2, 3 or even 4 months.

The progress meeting must be a conversation.

Conversations create clarity, but you cannot get clarity without be an active listener. Managers, it’s not your job to do all the talking. You should be asking questions and listening to learn, not to respond.

How are things going on the XYZ project?

Have you run into any unexpected challenges or roadblocks?

Do you have everything you need to hit the target?

And the best managers learn the communication and behavior style of themselves AND of each of their team members.

This is absolutely vital, because a more direct manager who loves to ask rapid fire questions will easily intimidate the person who’s processing the situation.

This one example is one I’ve seen played out many, many times. And it erodes respect and ultimately trust between both sides.

Create a space for radical candor.

Conscientious leaders and managers want honesty from their teams. But it takes time to build trust and get there. If you want to learn about what’s frustrating someone, or what their dreams are, or where they’d like to go, you must create a space for it to occur.

You might think of it as a safe space - I don’t really like that description and here’s why.

It can imply that what’s about to be said is 100% confidential. And that is not something you can promise.

If you learn that there’s another person who’s violating the company’s core behaviors, but you’ve given your word that “what you say here, stays here,’ you’re contributing to a larger issue.

Radical candor is when you’re willing to say what needs to be said.

It doesn’t give you permission to tear someone down. 

It doesn’t give you permission to curse or to say whatever you’re thinking.

It does NOT give you permission to gossip about or slander another person.

It gives you permission to be open and honest and to deliver the message with tact.

In other words, be kind. Be objective. Treat the other person (who may not be in the room) with dignity. 

Radical candor is uncommon. In fact, it’s downright exceptional to see it done well.

But that shouldn’t mean you fear it. You can actually normalize it by becoming great at it through feedback and accountability.

I trained a group of leaders in a large company on how to create proactive accountability, where there are no further questions about When, What, How or Who.

We framed it by creating a conversation around a set of Agreements and Commitments, where both parties listened to the needs and determined the best course of action.

Doing that eliminates questions and confusion.

I’ve always said that a leader’s number one priorities are to hire great people and create and defend your culture. Number 1 and 1A, if you will.

Get those wrong and you’ll struggle with turnover, losing customers and taking a massive hit to your bottom line.

Building a high performance workplace takes effort, time and commitment. 

But constantly losing your best people means you’re losing even more. You’re losing winning mindsets, your innovators, and your most effective problem solvers. 

If you’re serious about building a competitive edge over your competition, you’ll need a system that ensures the right conversations are happening between managers and employees.

Because conversations create clarity. Clarity produces action. Action drives results. 

If you want to learn more about how to ensure   the right conversations are happening in your company, I invite you to pick up the phone and call me directly at 319-929-2604 for a free, no obligation conversation.

I’m James Mayhew and I’ll catch you next time on LTV.