Is Turnover Killing Your Bottom Line?

 What does employee turnover cost?  

•          Corporate Research Council - Direct expenses can vary from 46% of annual pay for frontline employees, to 137% for a bank teller, to 176% for IT professionals and 241% for middle managers.

•          American Hotel and Motels Association calculated the cost of turnover for an $8 per hour employee to be $4,100.

•          Cornell University Hotel School says that the cost of turnover for a front desk employee in a hotel is $5,688.

•          American Organization of Nurse Executives  - says shows the cost of turnover for a Medical/Surgical Nurse to be $42K, and $64K for a Specialty Nurse.

•          PriceWaterhouse Coopers  - Turnover cost for the average hospital is $300K for every 1% increase in annual turnover.

These estimates vary widely because the researchers utilize slightly different methodologies in their calculations.  But regardless of how you cut it, the numbers are staggering.  While we would all agree that some turnover may be good, especially when it includes low performers moving on, we would also generally agree that much of the turnover we experience is not preferred. 

At a mid-sized company I worked with that employed relatively high income employees in the technology and software industry we calculated the cost of turnover using Corporate Research Council numbers for IT professionals.  With a 17% turnover rate, the impact was costing them over $7M annually.  When we looked only at the voluntary turnover, which was about 80% of that number, the cost was still above the $5M mark.

Many business operators hear these numbers and either consider them to be unbelievable or insurmountable, so they often ignore them and go on doing business the way they have always done it.  If they do chose to pay attention to them at all they may be satisfied with simply keeping their turnover rates within one or two percentage points of the norms for their industry.

This company took a different approach.  They valued their employees and wanted them to succeed.  They agonized every time they lost an employee to a competitor.  They were frustrated with the reasons employees gave for their departures (a topic for another post).  We joined forces and took action.  We launched a concerted effort to develop a culture of engagement.  We listened to employees by means of employee surveys and managers responded to their concerns and questions.  We revamped the performance management and rewards systems and equipped every manager with the skills and resources necessary to develop and reward their people.  The leadership operated on a philosophy of openness and transparency and share the results of employee efforts on regular interval, so they could see the difference they were making.  Their efforts resulted in a turnover rate dropping from 17% to 8% during a period when turnover averaged 19% for comparable companies in their industry.  That savings went directly to the bottom line, and the change was evident in the overall performance of the organization. 

These kinds of results can only happen when leaders are committed to Getting the Right People, developing processes, systems and a culture to Keep them, and Grow them to be the best they possibly can be.  

This is also why I love what I do with GrowthWise.  I have the opportunity everyday to help companies achieve these kinds of significant results.

How's Your Open Door?

In my last posting “So You Think You Have an Open Door”, I reviewed a few comments that I have heard from employees and managers over the years that tell me that the Door may not be as Open as many leaders intend.


Step back and review the comments from that post. If you are hearing any of those, or have a gut feeling they may be true, you may be asking what you can do to ensure that your Open Door Policy is achieving what it was intended to. Here are a few suggestions.

• You may want to re-define what you intended when you put the Open Door Policy in place, or at least, what you intend going forward.
• You likely wanted to create an environment of openness, honesty, transparency and trust, where employee problems can be resolved, issues and concerns addressed, and where employees can feel safe and fully engaged in their work.
• You may have understood that no manager can be all things to all employees all the time. Since it is possible, (even probable) for a manager to miss it from time to time with any particular employee, you may have wanted to provide an Open Door to ensure that employees have a place to turn so their issues or concerns can be appropriately addressed.
• You may have understood that every manager needs a coach from time to time, someone who can see and hear things from a different perspective. You wanted to be a team of resources to help managers grow in their effectiveness, learn to listen better, to understand various ways they are perceived, to improve their communication skills, and to look for solutions that may well be out of their realm of experience or out or their comfort zone.
• Clearly communicate your policy and vision for it.
• Communicate it over and over. It should be reiterated at every employee meeting and in newsletters, or in the various other means of communications you have. An effective Open Door may be your best tool at your disposal for increasing retention and growing better leaders, so don’t short- change it.
• Post it in every way and every where possible.
• Ensure that everyone clearly understands the vision for it until they are encouraging each other to act on it.
• Train your employees how to use the policy.
• Ask them to start by trying to address their concern directly with their manager.
• Then, if that fails, or for some reason seems untenable to them, encourage them to address it with their manager’s supervisor or another trusted member of management.
• Help them understand that unresolved issues are not good for them or the organization.
• Ask for their feedback along the way to learn how it is working.
• Ensure your employees understand what to expect when they use the Open Door.
• They need to know that the Open Door is not an “I get it my way” process, but is a means of being heard, being taken seriously, ensuring their concerns are adequately understood and thoroughly investigated and addressed.
• They also need to know that just because they raise a concern, the issue may not be resolved just the way they envision it, or as quickly as they may have hoped.
• They need to understand that even if their perceptions are correct, there are confidentiality and respect issues that may prevent you from telling them exactly how the issue is being dealt with.
• Always follow up with the employee who brought you their concern to see how they are doing and to let them know what you can about the progress of their issue.
• Be sure to let employees know that there is no retaliation, and they are to let you or another member of management know if they believe they are being retaliated against.
• However, as badly as I don’t want to say this, they need to know that sometimes subtle forms of retaliation exist and are difficult to prove.
• Thank them for the courage to speak up and do what is right.
• Train your managers to make the Open Door one of their best friends.
• Help them understand that they cannot possibly hit strikes 100% of the time, and when they miss it, they need someone to be their back up, for their sake, for the sake of the employee/s with concerns, and for the health of the organization.
• Train them how to be open to feedback
• Whether the employee’s perspective is accurate or simply a misperception, it is the reality they are living in.
• If it is accurate and requires adjustment, help them identify the resources to make the change.
• If it is inaccurate and a misperception, help them to catch it out to the side rather than right between the eyes, where they tend to take it too personally and defensively.
• Let them know that even a hint of retaliation can and is likely to cost them their job as a leader in your organization.
• Let them know that you expect them to promote the Open Door policy, and invite their employees use it should they feel uncomfortable or unsafe talking to them.
• Teach them how to respond should an employee come to them using the open door about a concern.
• Help them to listen
• Have them ask what happened when the employee approached their own manager with their concern. If they haven’t approached them with it ask them what is preventing them from doing so. If it is a lack of skills, teach them how to have these crucial conversations.
• Have them ask the employee, “What is it that you need or want from me at this time?”
• Frequently employees just want someone to listen to them, or coach them on how to deal with their manager or concern.
• However, help them be aware, that if they are reporting an ethical violation or a violation such as sexual harassment, you must proceed to investigate, even if the employee does not want you to.
• Circle back with the direct reports of your managers to see what kind of environment they are creating.
• The Open Door culture is your responsibility. Own it.
• As much as you want to believe that you have great managers who treat their people well, you cannot know whether that is the case unless you create an Open the Door for these employees to tell you what is actually going on with them.
• I have seen too many highly talented people leave companies because of their manager, because they felt like no one else cared, or because they believed the senior manager would side with their manager and their efforts would fall on deaf ears.
• The truth is, your managers may “feel” like they are doing great, and be missing it completely.
• Then there are those managers who have made threats that communication up the chain is unacceptable, or will be viewed harshly.
• Checking in and giving the direct reports of your managers a platform for being heard is the only way you will help your managers get better, and improve the engagement culture of your organization.

There are probably more things you can do to ensure that your Open Door is actually open. If you’d like to share, I’d love to hear from you.

So, You Think You Have an Open Door?!

In most of today’s companies and organizations it is likely that an “Open Door Policy” exists, either formally, or as a mantra of the culture the organization is trying to create. These policies or mantras usually mean that employees can come to you at any time with any concern they would like to address. And, if they happen to feel uncomfortable addressing their issue with you, they are encouraged to find a leader or manager in the organization that they trust, to address their concern. This is usually followed by a statement stating that any retaliation to a person who uses the Open Door is completely unacceptable.

After several years of counseling and coaching employees, executives, and being on both sides of that equation myself, I believe it is a good practice periodically conduct a thorough examination on the extent to which your Open Door is actually doing what you intended it to do.

I suggest this examination primarily because, it is actually far better not to have such a policy than it is for your policy to be a sham. Another reason for the examination is because of what I have heard and experienced over the years about the Open Door:

• I am amazed at how many times I have heard employees tell me that their manager has strictly prohibited them from calling anyone at the “Home Office”, from calling the employee hotline, or from speaking to someone up the chain of command. Managers will often state something like, “We take care of our own problems here at home!” I don’t know if you realize it, but that sounds a lot like the words that come from an abusive or dysfunctional family in which parents tell their kids to keep our secrets to ourselves. (Sorry, the old family therapist creeping out there)
• I am also amazed at how often people tell stories of being threatened or of actual retaliation having occurred when they have used the open door.
• I am shocked at the number of managers who tell me an Open Door Policy exists in their workplace, but then tell me that they have never (and many would never) encouraged their employees to utilize the Open Door if they felt like they cannot come to them with an issue or concern.
• I am stunned by how few managers or leaders spend time with the employees of their Direct Reports, to determine how effective their managers are in addressing employee issues, or how seldom they check in to learn, first hand, the kind of culture or working environment their managers are creating.
• And, I am dumbfounded by how frequently managers fail to understand how vulnerable employees often are or feel when they used the Open Door.
• And I am surprised by how frequently managers fail to follow up and check back with an employee who has taken great risk in using the Open Door, just to ensure their issue was appropriately and respectfully addressed. Some are so insensitive to the risk factor that they simply tell the manager of the employee who came to them about the incident, accept their version of what happened, and expect them to follow up with the employee, or to act on it appropriately!

I know. You're probably right.  Maybe it’s just me!

A tribute to Zig Ziglar, a Man who changed my life.

It has been a couple of weeks since Zig Ziglar died.  Since then I have continued to see postings and reminders of the impact he has had on so many.  I want to add to the tribute.

I grew up in a small town in East Texas and didn’t get out much, and I grew up in a family that was pretty conservative and was raised by a father who was demanding and critical. I was the youngest of three children, raised in the shadow of an older brother, who was better than me at just about everything.

Though going to Church was a significant part of my life, my faith experience was not all that different. I grew up in a church that was very sectarian in regards to other churches. It did its best to criticize and isolate itself from others who did not believe exactly as they did. Needless to say, I wasn’t encouraged to enjoy the fellowship of the broader Christian community, because in the mind of my denomination, there was no broader Christian community. If you were not of their brand, you were not “truly” Christian. It still amazes me how honest, studious, Christian people can maintain such a sectarian belief, especially after a thorough search of God’s Word and understanding of God’s Grace.

In addition, gaining approval from God was not much different than gaining approval from my dad. If I didn’t behave properly, there would be no relationship at all. If I did behave, the best I could hope for is to stay out of trouble. I can remember the one time in my life that my dad expressed his gratitude, appreciation or approval for anything that I contributed to the family. As a youngster, I tried hopelessly to recreate that experience. Experiencing failure there, I transferred my efforts to gaining God’s approval, where I hoped to serve Him in such a manner as to hear him say “Well done” some day. As you can imagine, growing up like this didn’t do a lot for my self-confidence. However, it did put me on a quest to know God as he is revealed in Scripture.

That is where Zig Ziglar came is. I have never met him, but have heard him speak and read his words hundreds of times, sometimes on tape and a couple of times in person. When I was in my early twenties, I studied the Bible two years and set off to Canada to help plant a church in my denomination. There, I met a young man who was a realtor in British Columbia, who generously shared with me a set of Zig’s How to Stay Motivated tapes. There were a couple of things that caught my attention in those tapes. Here was an authentic, God fearing man, who seemed to love God, and seemed so full of life, joy and optimism, and he was not a part of my denomination. Could he actually be a Christian? On top of that he shared practical principles that changed my life, one of which continues to motivate me: “You are who you are and what you are because of what you have put into your mind, and you can change who you are and what you are by changing what goes into your mind.” Could it really be possible for me to believe differently about myself and all the things I had grown to believe about God? Is it possible that this man was truly a Christian and honest in pursuit of God’s Word. Is it possible that God really did love and value me, regardless of what family history or my religion had told me? Is it possible that this teaching, which I had been warned to be no more than “pop psychology” contained more truth than much of what I had been taught?

I committed to dig into the Word to learn the truth. I really wanted to know what the “good news” was; what it meant to “rejoice in the Lord”; what a “light burden and easy yoke” was all about; what “no condemnation” meant; what it meant for a man like Paul who seemed to already know Christ to say he “wants to know Christ and the power of his rising”; what it meant to experience the continuous cleansing from sin to someone like me who continues to struggle with the sinful nature; what it meant to understand that I am a child of God, a joint heir with Christ, and filled with his Spirit as a guarantee of what is to come; what it meant to be God’s chosen, and dearly loved. It took some time and numerous other experiences and encounters with people like Zig Ziglar, but I eventually did come to understand the awesome power of God’s grace and to embrace Zig Ziglar and thousands of others like him as brothers in Christ.

My path led me away from the church planting experience which I loved so much. As you can imagine, my denomination had little patience for one who came to believe as I did. They cut off my financial support, and I was left to depend solely on Christ. That was a little scary. I confess that I frequentlylean on my own strength more than I lean on His, but he is still working to extract that fear from me.

Through specific answer to prayer, God directed me to serve Him in corporate America, where for all intents and purposes, I became a public speaker and trainer to some of the largest companies in the world, including Fortune’s #1, Wal-Mart. When I was serving them as a representative of their Associate assistance and counseling program, I traveled the U.S., Canada, Puerto Rico, and Mexico, speaking, training and helping people find hope in hopeless situations. I was fortunate enough to be in a company that was led by a whole lot of Christian people, including Sam Walton. And the company I represented was founded by a dear Christian friend. We were group of Christian counselors providing a variety of helpful services and resources for living for employees of these great companies.

I’ll give Zig Ziglar and God credit for helping me be able to be an effective public speaker. I mean, I needed all the help I could get. I was member of the church’s youth group that the pastor could never get to stand up and help lead the youth led services. I will also give him credit for how to be a living witness, by simply sharing my story. And early on in this journey, I followed his example of committing to being a witness for Christ wherever and whenever God gave me a platform to speak.

I thank God for Zig Ziglar and the many godly Christian leaders I have met since that time, who have impacted my life in a similar manner. Mr. Ziglar, you will be missed, but your influence and testimony lives on. Thank you.

A Recipe for Disaster Trying Harder with Outdated Technology

The lessons on leadership from Gettysburg continue to abound. That tells you just a bit about how impactful this leadership development program has been for those of us who had the privilege of participating. I want to commend The Lincoln Leadership Institute on utilizing the metaphor of the battle so effectively and for engaging some of the most qualified resources available to lead our team through these discussions.


One of those resources is Dr. Jared Peatman who is one of the leading historians on the Battle of Gettysburg, and maybe on the entire Civil War. I think others in our group thought the same, because I’m sure I overheard a “stump Jared” contest during their dinner conversations one evening. Through all three of my visits I did my best to stay within earshot of Jared as much as possible. Not only does he know his history, he knows people, organizations and leadership, and he is able to make profound connections for his audience.

On one occasion, as we strolled through the battlefield museum at the visitor’s center, several of us stopped by a display of rifles that were used during the Civil War. Jared began to explain the difference in these weapons, comparing smooth bore muskets to rifles, carbines, etc. He mentioned that “rifling” in the barrels of the guns was a fairly new technology at the time of the Civil War, and made a significant difference, especially to the Union forces who were more heavily armed with these weapons than were their Confederate counterparts. He described the ball coming out of a musket being similar to a bowling ball bouncing back and forth down the gutter at the bowling lane, with accuracy of about 100-150 yards on a good day with a good gun. The reloading capacity for a musket was two to three shots per minute. He described the new rifling technology capable of increasing the accuracy up to 250-300 yards, with reloading capacity of up to six shots per minute.

Then he made a statement that stuck with me because of its implications. He said that “we tend to fight today’s wars with our last war’s technology and strategy”. He went on to explain that the leaders of the armies of the Civil War earned their reputations in the Mexican American War, where the musket was the weapon of choice for the soldier. Many of these leaders were unfamiliar with the new rifling technology that had been much improved and utilized in the years after that war. The strategy of “Don’t shoot until you can see the whites of their eyes” worked fairly well for the inaccurate musket, but was a recipe for disaster up against foes armed with rifles. This is likely to be one more reason why there were so many casualties during this war.
It also reminds me how crucial it is for leaders to stay current on the technologies and changes that are occurring in their industry, profession or environment, because trying harder with the old strategies designed for old technologies or old environments simply cannot result in victory.

What Generals Do.

In my previous post on June 22, I outlined several leadership lessons from our first leadership development session at the Battle of Gettysburg. Since then we have taken a couple of more historical trips; first to Boston and then back to Gettysburg where our second cohort of leaders were privileged to experience this transformational leadership journey.


While in Boston our company president ask those of us who attended the first session to offer one reflection on leadership that we had as a result of participation in the Gettysburg experience. Each participant spoke of the transformational impact that this experience had on them both personally and professionally. Most came away understanding that we are in this “battle” together, this battle to achieve our mission and vision. The camaraderie that resulted from such a time together will certainly carry us far.

After further reflection, I shared with the group one more take away that I took from the Battle of Gettysburg. “Battles and wars are not won by Generals. But Generals determine whether battles and wars are won.” Reliving the battle experience, I don’t recall many Generals lifting a weapon against the enemy. This was especially true for the senior most Generals. However it was particularly apparent that these Generals created the environment, set the stage, inspired the troops, and made decisions that were crucial to the outcome of the battle and of the war.

As leaders, we have the opportunity every day to create an environment and make decisions that enable our front line employees to achieve great things. Listen carefully. Think strategically. Be flexible. Remain humble.

Reflections on Gettysburg

I have had several weeks to reflect on a recent visit to Gettysburg, PA. Our leadership development team chose that site and the Lincoln Leadership Institute as the location from which we would begin our new Strategic Leadership Development program. Our first group consisted of 19 senior leaders including our Chairman/CEO and one of our Executive Vice Presidents. We are preparing to take another group of a similar size through the same experience in July. So not only have I had the opportunity to reflect back, I have had the opportunity to refine our focus while considering the implications for the upcoming group.

Prior to the visit, I watched the movie, Gettysburg with Sam Elliot and Martin Sheen, read the book Killer Angels by Michael Shaara and Pulitzer Prize winner, James McPherson's Battle Cry of Freedom, but none of this prepared me for the leadership lessons that would jump off the battlefield during our time there and every single day since. Some of my take aways:

1. True strategic thinking is a rare. The ability to step away from the heat of the battle and the whirlwind of daily operations to consider the big picture and the future. General John Buford demonstrates this competency before the battle began. It is obvious that he had not waited until the onset of the shooting to step back and consider the larger picture, the current state as compared to the desired future state, and all they it may take to achieve that future state.

2. Courage to stand by one’s convictions, even when it may be costly and painful, is also a rare occurrence. General Buford stood strong to hold the high ground on day one of the battle, even in the face of an army that far outnumbered his forces. General Joshua Chamberlain demonstrated similar courage as he held the left flank on Little Round Top and mustered the courage of his entire regiment to stand strong, even when they had run out of ammunition.

3. An effective leader must appeal to the variety of deeply held convictions of their troops to keep them fully engaged. Some fought because they abhorred slavery, some because they clearly believe that a United States was better than a divided country, some fought for freedom, because they believed it was wrong for one entity to impose its will on another, some fought for the community they called home, some for their family and friends, some for fear, some for the opportunity for honor and glory, some for God, some out of anger, some for pride or respect. General Chamberlain seemed to get this better than most, and was able to help appeal to the hearts of many diverse individual’s inspiring them to realize their own sense of mission and purpose in this war.

4. Some leaders are either too stubborn or too arrogant to see or be convinced of a reality that should cause them to change their minds. General Robert E. Lee demonstrated this failure, in spite of strong words from his most competent leader, General James Longstreet. Another leader who demonstrated this failure was Major General George Pickett, who was so enthralled with the opportunity for personal glory, he failed to protect his troops, and became the only survivor of his entire regiment on the last day of the battle in what has become known as “Pickett’s Charge.”

5. If leaders do not create conditions for communication to occur; if they do not welcome dissenting views and consider them carefully, they are doomed to fail. This was another failure on the part of General Lee. It is interesting when he had the opportunity to invite the opinions of his other Generals, who would have certainly tried to persuade him to change course, he chose to only invite the opinion of one, and then he demonstrated such disappointment with the answers he received that General Longstreet, simply tucked his tail and led an army on to its destruction.

6. When leaders are so caught up in being “right” and feel they have been anointed by God, and have the resounding adoration of some troops (whom they exclusively chose to listen to), they are doomed to stay on their existing track to destruction. General Lee certainly had this messiah complex, as have many others throughout history, in many sectors, including civil, business and religion.

7. Sometimes victory is fortuitous. The Union won the battle, in large part, because they got to the high ground first, and they held it.

I still cannot fathom that fifty-eight thousand troops were killed in Gettysburg on those three days, or that six hundred and fifty-thousand troops were killed in the Civil War. I cannot imagine an America that is not a United States where we have freedom from coast to coast and border to border. I cannot imagine an America where slavery had not been abolished and where the conviction that “all men are created equal” with equal opportunity to pursue their dreams and overcome obstacles does not prevail. The United States we enjoy today, even with its many challenges, is the result of many great acts of leadership.

Can you imagine what your community would be like without your company or your leadership? Stop and think. Are you exhibiting the leadership competencies that will create a positive future?