Best practices in managing employee turnover

Jennifer Ferris, CCP Sr Compensation Professional Mykkah Herner, MA, CCP Director of ISX Services www.payscale.com Ivan Hurtt Mykkah Herner SENIOR PRODUCT MANAGER MODERN COMP EVANGELIST BAMBOOHR PAYSCALE ihurtt@bamboohr.com @mykkah_herner www.linkedin.com/in/ihurtt MykkahH@payscale.com www.linkedin.com/in/mykkahherner A Changed Perspective Millennials v 75% Millennials will comprise 75% of the global workforce by 2025 - Deloitte v 91% 91% of Millennials expect to stay with your company fewer than three years – Future Workplace v 2yrs Average tenure for Millennials is years (5 years for Gen X) – Payscale Baby Boomers 43% Within the next 10 years, 43% of the US workforce will be eligible for retirement - Forbes 1yr Among the jobs that 39-44 year olds began, one third ended in less than a year – Forbes 90200% Cost of replacing an employee is between 90-200% of their annual salary – SHRM Contingent Workers 83% 83% Of executives say they’re increasing contingent workers - Oxford Economics 23m There’s projected to be 23 million contingent workers by 2017 (up 26% in years) 52% 52% of Millennials expect to work independently (82% in emerging markets) – MBO Partners – Deloitte Additional Dynamics • Workforce competency and skills gap • Increased competition • Globalization • Culture • Competition for talent • Stresses on work-life balance • Etc –Bersin by Deloitte –Ram Charan Best-selling Author, World-renowned Business Advisor Defining and Quantifying Turnover Evolution of HR H Strategic Business Value Operational L Micro Small Transactional HR HR viewed as a cost center Mid Large High-Impact HR HR as a strategic investment Evolution of HR H Strategic Business Value Operational L Micro Small Transactional HR HR viewed as a cost center Mid Large High-Impact HR HR as a strategic investment Understand your true worth as a strategic necessity ESCAPE ELEVATE Eliminate the unnecessary Maximize business value shed all the dead weight align activities to strategic outcomes Organize your information Measure and report to lay a foundation for insight the value and impact of your work Automate the operational Solve meaningful problems set yourself free to great work learn to think, act, and win like a business The Impact of Turnover on your Business • Morale • Engagement • Performance • Training • Knowledge retention • Nimble to market changes • Cost to replace http://www.corporatelearningnetwork.com/ Setting Your Comp Plan Up for Success Solid Base Pay Plan Clear Strategy Incentive Plan http://businessmodelalchemist.com/blog/2011/11/make-your-business-modelclear-with-vivid-thinking-guest-post-by-dan-roam.html Competitive Market Pay What is the right compensation mix for my org? Compensation Strategy Talent Market(s) Level of competitiveness What to reward Industry Size Location Org type How aggressively to pay Performance, Experience, etc How organizations use variable pay? 61.8% 40.0% 25.7% 15.8% 18.1% Retention bonuses Hiring bonuses 14.4% Individual incentive bonuses Team incentive bonuses Spot bonuses Other (please or other specify) discretionary bonus programs PayScale 2016 CBPR Recruitment and Retention Plans 2016 Plans for Recruiting and Retaining Top Performers, by Company Size 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Merit-based pay plan Non-discretionary Discretionary bonus Stock option/grant incentive based pay plan plan plan Less than 100 Employees 100 - 1,000 Employees Learning and developmental opportunities More perks-gym memberships, catered lunch, etc Other (please specify) More than 1,000 Employees PayScale 2016 CBPR “I found a salary report on the internet and it says I should be paid more…” Immediate Actions  Calculate turnover rate  Identify good and bad turnover  Brainstorm retention efforts that work  Evaluate your comp plan – does it align with org objectives for retention? Thank you! Follow BambooHR and PayScale on social media: bamboohr.com/blog | payscale.com Questions? BambooHR Check out ondemand videos for Elevate at https://www.bamboohr.com/elevate/ PayScale Download our free ebook Turnover: The Good, The Bad, and The Ugly at http://resources.payscale.com/hr-whitepaper-turnover-the-good-the-badand-the-ugly.html ... Solve meaningful problems set yourself free to great work learn to think, act, and win like a business The Impact of Turnover on your Business • Morale • Engagement • Performance • Training • Knowledge... predict turnover based on generation Turnover is always time-consuming and costly The Role of Corporate Culture in Turnover Next Gen vs Traditional Organization Flexible work environment Training... Defining and Quantifying Turnover the rate at which people leave a place, company, etc., and are replaced by others Add good complexity Good Turnover vs Bad Turnover Low Performer Voluntary Involuntary