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The Myths

Most business owners and managers don't concern themselves with employee turnover until it becomes a problem. As the economy slowly gains traction, surveys reveal that a larger number of employees are likely to seek out a job in a different organization over the next year.
 
Global consulting firm The Hay Group, says employee turnover will increase in 2014 to 161.7 million employees, a 12.9 percent increase over 2012's figures. Additionally, their research indicates if employees receive an enticing job offer an increasing number of employees reporting that they would take the offer.
 
In the child care industry, employee turnover rates have always been higher than the national averages, and so, it behooves us all, large operations and small, to recognize the myths about employee turnover and the ways to reduce and/or prevent it.
 
Some common misconceptions about turnover are:
 
* All Turnover Is Bad
 
There is both good and bad turnover. Losing a talented, conscientious, valued employee is bad. Losing a lousy employee is a good opportunity to better your operation.
 
* Most People Leave Over Pay
 
While salary is a factor, research tells us that most often the motivation to search for a new job arises due to:
  • The employee's relationship with their immediate manager or supervisor
  • Promotion opportunities
  • Lack of opportunity to learn new information or skills
  • Having to deal with ongoing conflict or stress
*There's Nothing You Can Do About Turnover
 
Many business owners and managers believe high turnover is part of their industry. While this may be true, some businesses in the exact same industry have much lower turnover ratios than others. Most employees agree to work for you because of your reputation or their perception of your organization (or because they really just needed a job badly).
 
Usually, an employee voluntarily leaves due to a lack of a decent relationship, or  confidence in, their immediate supervisor or manager. Reputation and perception will recruit, but leadership and culture retain employees.
 
*The Number Of Turnovers Isn't Important
 
Turnover percentages have to be taken into context. Factors like industry and geography certainly come into play. For fast food and retail in major metropolitan areas, a 30% turnover ratio may be considered the norm. The same ratio in the child care industry can cause parents who are looking to find consistency an predictability for their children to become concerned. While ratios are important, the reasons behind the turnover are much more meaningful in planning actions to deal with the problem.
 
*Profitability Isn't Impacted By Turnover
 
Some believe that due to the inevitability of turnover, the only thing to do is deal with it and find new employees. However, research shows that regardless of the industry, businesses with lower turnover have greater profitability than companies with higher turnover, some as much as four times more.
 
Think about it logically. Long term employees build strong relationships with clients. Employees with these strong relationships who leave, often take your clients with them.
 
OK, now that we've explored the myths surrounding employee turnover, be here next week for Part II when we will discuss the ways to reduce it.
 
 
 
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