Everybody knows turnover can cost a bundle, especially when you don’t expect it. You’ve seen the numbers: It costs one to three times annual salary to replace an employee. But the numbers don’t tell the whole story. In fact, the costs you can’t quantify hurt way more than the ones you can.
What do we mean by that? For one thing, when a key player leaves with little warning, workload has to be shuffled off to others, creating stress and possible losses in productivity. Also, key knowledge tends to get mislaid, and people are demoralized to lose a valued colleague. If enough of these dominoes fall, disaster strikes.
In a survey a couple of years back, 84 employers were asked what the most painful result of unexpected turnover was. And, perhaps surprisingly, just 6% of those responding pointed to quantifiable costs like job ads, interview expenses, etc.
For the rest:
- 57% said others have to assume extra workload, stressing them out.
- 18% said morale suffers.
- 18% said managers bear unquantifiable strain in hiring and training new people.
What managers can do
It follows logically that when managers are prepared for turnover, the organization is in a better position to weather it. Here are three strategies managers can use to prepare internal replacements and ease the pain of sudden departures:
1. Find the right ‘bench players’
You know that sports teams keep a “bench” of players who can step in when somebody gets hurt. But have you thought about your bench? Try this: Identify the position in your area that would cause the most serious trouble if the person holding it left without warning. Then plan out how you’d fill that position in a pinch. Do you have a bench player ready to step up?
For your bench, consider such people as:
- cross-trained employees who can be spared from their current assignment,
- temps who have already filled in when key employees were away,
- recent retirees who are willing to return for specific duties or projects,
- former employees who may be tired of the greener pastures they left for, and
- people who left for family reasons – like stay-at-home moms and dads – who could return on a job-share basis.
2. Think ‘develop,’ not ‘replace’
Oddly enough, the best replacement strategies don’t focus just on replacing employees. No, you end up with more and better replacements when you broaden your focus to developing employees. Steve Knight, a Palo Alto, CA-based talent management expert, puts it this way: When you have a development strategy for all or most employees, your replacement pool automatically widens as more people gain a broader array of skills and capabilities.
Knight says tactics like these can be part of your plan:
- Job rotations. Let promising employees change positions once a year or so to broaden their skills.
- Role “shadowing.” Give employees a month during which they perform a key player’s work “offline.” Ask that player to assess the results.
- Targeted projects. Assign employees a project that develops a specific capability outside their job area.
3. Know where your talent is
The day a key position becomes vacant is not the time to begin looking for in-house talent to fill it.
Better: Do periodic talent reviews. This doesn’t have to be a complicated process that makes your head hurt. You can, for instance, annually do a backgrounder on your reports to pinpoint their hidden talents and abilities.
Or try this simple process: Get a whiteboard. Draw three bands on it: “stay in,” for people who should remain in their jobs, “ready later,” for those who can advance but need further development, and “ready now” for those who could move right away – if you needed an emergency replacement, for example. Write the names of your people on Post-its, then stick the notes inside the band where they think the people belong. If possible, get another manager or two to discuss your “ratings” with you. You’ll reap a lot of ideas about whom you could call on if you had to fill a vacant position tomorrow.
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