BlueSteps chats with Leigh Branham of Keeping the People, Inc. about his new book The 7 Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It’s Too Late (AMACOM, updated 2nd edition, August, 2012)

BlueSteps: First of all, can you share with us a bit about the work you do at Keeping the People, Inc.?

Leigh Branham: I help companies diagnose root causes of employee disengagement and turnover, and then develop strategies for re-engaging the workforce, which typically leads to increases in customer satisfaction and greater profitability. This usually involves conducting an employee engagement survey, then training managers in the drivers of employee engagement and how to leverage them. I also train employees to keep themselves engaged and many also get involved in coaching managers and executives.

BlueSteps: You describe in the book how employee turnover is not a single event, but rather a process of disengagement. What are some of the common warning signs? What can senior management—who are often not in touch on a day-to-day basis with employees at all ranks of their organizations—do to maintain a high level of employee retention. Is it more a question for HR, or does it really begin in the C-suite?

Leigh Branham: There are several warning signs a manager should be paying attention to, many of which are physical—the employee may stop making eye contact as you pass in the hallway, or withdraw more into their office, participate less in meetings, or be absent more often.  Because two-thirds of all employee turnover is triggered by a shocking event, such as being passed over for promotion or getting a new supervisor, attention should be paid to that aspect as well. Other warning signs are things like working for a bad boss, or maybe it's simply been a long time since the individual's last promotion or pay raise and the person is ripe for moving on.  Senior managers need to hold all managers accountable for improving metrics like high-performer turnover rate, first-year turnover rate, percentage of employees with updated IDPs (Individual Development Plans), and unit employee engagement survey scores. Senior leaders should also set the example for creating a caring culture and should make sure all managers have received training in how to keep employees engaged.  Employee engagement absolutely begins with the C-suite.  I consider it a bad sign when a CEO assigns employee engagement initiatives to HR.  HR is a valuable partner, but management should own it, drive it, and be held accountable for it.

BlueSteps: In recent BlueSteps executive outlook surveys, BlueSteps member executives from around the world have often cited talent retention as a key business concern. Has retention become more difficult since the economic downturn of 2008?

Leigh Branham: Employee retention has actually become easier for most companies in the U.S. because of rising unemployment since the Great Recession started. In fact, it has caused many companies to become complacent about talent retention.  About half the workforce is restless and ready to bolt for a better work environment as the economy improves.  Many companies will be caught flat-footed as the war for talent resumes.  Of course the war for talent never ended in certain industries, like health care, and now transportation, construction, IT, and technology where the supply of skilled workers just isn't there. In Asia, recruitment and retention of educated and experienced technical and managerial talent has been a huge issue for years now and will continue to be.  Retention is always important, not just because turnover is costly (see my cost of turnover auto-calculator at www.keepingthepeople.com), but because workforce stability is a key to successful longer-term customer service and profitability.

BlueSteps: The book mentions how, according to exit interview results, the number one reason for employee resignations is a lack of trust in senior management. It goes on to mention that, in light of scandals of the past decade, many employees now consider CEOs guilty until proven innocent. What would you say that senior leaders need to reevaluate in order to reverse this unfortunate trend?

Leigh Branham: Simply demonstrate that you are more concerned about the welfare of employees and the company than you are about your own personal enrichment.  Make the rounds and talk one-on-one with front-line workers, hold 50-50 meetings where you talk half the time and you listen the other half, ask for their ideas about how to make the business more successful, implement the ideas that are feasible, then recognize and reward those who submitted the ideas.  If you've been isolating yourself in the C-suite, stop thinking that because they pay you the big bucks that all the ideas have to come from you.  Don't conduct an employee survey unless you intend to take actions based on the results. Don't tolerate managers who abuse, disrespect, mismanage, and drive away talent.  Confront that kind of behavior, then either coach them or show them the door.  And make sure your vision for the future is compelling, convincing, and clearly articulated. 

BlueSteps: In terms of compensation, in order to retain employees, most organizations feel they have to pay above what the market is paying for similar jobs. Do you find competitive pay to be a big problem among companies these days, and has this become a greater problem since the recession?

Leigh Branham: Yes, pay has become more important to employees, along with benefits, because for many people, pay has been cut or frozen, or pay increase percentages have been reduced, and of course, the cost of health benefits have increased for most employees.  However, my research into what makes companies great places to work has led me to the conclusion that paying significantly above market isn't necessary if...and this is a big "IF"...the company has a healthy culture—characterized by caring and competent senior leaders, teamwork (instead of "us vs. them" culture and lack of communication between departments), ample opportunities for learning, growth and advancement, and managers who recognize, praise, listen, give feedback, coach, don't overload and burn out their direct reports, and don't avoid difficult conversations. 

The main problems with pay are: 1) not paying "at market," 2) internal pay inequity for those doing the same jobs and for recent hires vs. longer-tenured workers, and 3) the failure to link employee performance to pay.

BlueSteps: The book discusses psychological contracts and matches between employees and their immediate supervisors. With the demographics of the workplace shifting from Boomers to Gen X and Y, what changes if any have occurred in workplace expectations, and how is this affecting employee retention?

Leigh Branham: There are several key issues where older and younger generations see things differently, especially regarding loyalty, learning, feedback, and work/life balance. Because Millennials and Gen X-ers saw their parents be downsized, most don't understand why anyone would expect lifetime employment or have long-term loyalty to the employer. Instead, they expect lifetime employability, meaning that if their employers provide opportunities to keep learning, they will stay.  So, you could call that a new version of loyalty.  That means it's a problem that many companies cut training at the first sign of economic trouble. They need to keep in mind that the best learning happens mainly through feeding people new challenges. I saw research that said nine out of ten Millennials (born since 1982) expect feedback once a day. That's probably not realistic, but older managers better realize that younger workers, because they were raised with video games and computers that gave them instant feedback, and they have been intensely coached by their Boomer parents, have a need for more frequent feedback isn't going to go away. That means older managers need to meet their expectations halfway, but also challenge them to ask for feedback when they feel the need for it instead of being passive. Regarding work/life balance, again, Gen X-ers and Millennials value having a rich life outside work more than their parents did, and managers are going to need to accommodate that to some degree while also rewarding sacrifice.

BlueSteps: Considering shareholders, when employees hear the shareholder mantra coming down from the C-suite over time, can this give an unintended message that CEO interests are only with the shareholders and not with the employees that make up the company? How can senior management better balance what they communicate in terms of shareholder interest versus the interests of the employees that comprise their companies?

Leigh Branham: I recommend that senior leaders read the book, Employees First, Customers Second, by Vineet Nayar, CEO of HCLT, the company that was named the best place to work in Asia or Delivering Happiness, by Tony Hseih, CEO of Zappos, or Nuts! by Herb Kelleher, former CEO of Southwest Airlines.  All these CEOs put employees first and, by doing so, delivered first-class customer service and terrific results for stockholders. It's no secret that public companies need to think more long-term. Another great example is Jim Sinegal, the recently retired CEO of Costco, who, when shareholders complained to him about the too-generous benefits they thought he was providing employees, responded by saying, "I'm not building a company with the next quarter in mind. I'm building a company that will still be around in 50 years."

BlueSteps: Lastly, what do employers expect, and what are they seeking these days from company leaders? What today instills employee loyalty?

Leigh Branham: Any given employee may expect something different as the main thing that drives his or her engagement. For one employee, feeling a sense of mission may be most important. For another, it's having an interesting challenge. For others it may be learning, or feeling valued, or work/life balance.  The best places to work tend to offer all the above, but smart managers know how to identify each employee's hot button. That's why I offer a workshop for managers called "Driving Engagement...One Employee at a Time."  It's up to managers to get to know what each person needs and provide it if they can. Mark Hirschfeld and I describe the six universal drivers of employee engagement in our book, Re-Engage: How the Best Places to Work Inspire Extra Effort in Extraordinary Times and describe 121 practices for increasing engagement and employee loyalty.

BlueSteps: Thank you, Leigh, for taking the time to share with BlueSteps some themes from 7 Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It’s Too Late.

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