Unhappy salesman

Steve LePatner’s insights on employee turnover are spot on. The impact on the organization can be especially costly for sales organizations for several reasons:

  • Loss of revenue is an immediate and certain issue when you lose salespeople
  • Recruiting and hiring new sales talent often takes longer than other positions
  • Disruption of customer relationships, often the hidden cost you may not see until they vote with their feet and move to a new vendor

Salespeople leave for many of the same reasons others do but compensation moves to the front of the line when companies hand out unrealistic or unachievable quotas year after year. Sales management needs to balance the corporate goals with the reality that comes with insufficient planning, marketing or industry trends to make sure they have a sustainable business plan. Losing your best salespeople every year should be a good indicator your plans are not realistic…


Why Employees Move On To Greener Pastures

(Courtesy of Steve LePatner from Howard Lee & Associates http://www.howardlee1.com/)

Employee turnover rates are climbing and are projected to continue to do so over the next decade.  Much of this turnover is due to younger workers replacing those who are retiring.  Generation X (born between 1965 and 1980) and Generation Y (born between the early 1980’s and early 1990’s) tend to change jobs more frequently.  This trait poses a challenge to any organization’s retention efforts.

The best defense is a good offense.  That offense is to understand why people are leaving.  There are a wide variety of specific reasons why employees resign.  The best way to determine specific reasons is through exit interviews conducted after the person has left their position.  Delaying the exit interview minimizes emotional responses, especially if the departure was due to a conflict.

In the majority of organizations, when reviewing exit interview data, there is usually an underlying theme of management. Data shows repeatedly that:  People don’t leave companies, they leave managers/supervisors and the overall work environment!

The most common reasons that have to do with management include:

  • Lack of training
  • Poor supervision
  • Conflicts with management and/or other team members
  • Management/employee mismatch

Conflicts are one of the biggest catalysts for turnover.  It is also one that can be contained if acted upon quickly.  Many times it takes just one or two Difficult Employee types to decrease morale thus creating a negative work environment.  With upwards of 50 hours per week spent at work, atmosphere is everything.

Salary is also a primary reason for turnover.  There is a “salary sweet-spot”of $80,000-100,000 that sees the least amount of turnover.  Those above and below this are more likely to leave due to salary.  Employees below the sweet-spot feel undervalued and will move on to a position that pays what they feel they are worth.  Those above the sweet-spot simply have more options, especially in high demand fields.

Employee turnover directly impacts an organization’s bottom line.  Issues with management and salary are only two of the most common reasons why employees move on.  Many times organizations realize there is a problem when it is too late.  In our next article we will reveal how to use predictive analytics in talent management.