Why Service-Industry Employees Quit
Despite what some may think, organizations cannot buy themselves out of the employment dilemma. But they can do what almost no one else is doing. They can identify specifically why employees are leaving as well as why employees are staying and then leverage the positive and countermeasure the negative.
Through proper analysis, countermeasures, and execution companies can begin to create and enhance a competitive advantage. If it is very difficult to hire good candidates then shouldn’t the focus be on retention? Why continue to fill a bucket that has a massive hole in the bottom? If you subscribe to this logic then the way to getting ahead begins with knowing the actual unfiltered situation even though the truth may hurt.
Once the actual situation is known it will unleash the ability to know what to do and improvement will begin to take form. No longer will organizational leadership say: “I don’t know what to do.” Central to that improvement undertaking is ensuring the value equation is well understood, embraced and embodied within the organization.
The value equation is not about lowering accountability by expecting less of people or being more tolerant of poor performance - a sad reality for those organizations living in the employment dilemma vortex. It is actually about raising expectations and driving highly competitive performance. It is not about the work one does; it is about the actual employment environment in which one works - it is about the organization’s culture. The employees that are aligned with this thinking will embrace the high expectations and often exceed them.
Regardless of title, job or pay, I have always found people want to simply know three things: Do you value me? Do you appreciate what I do? Do you care about me or only the end result of what I do?
Getting the answers to these questions right does not need to cost any additional money, but all of which will drive world-class performance and significantly improve retention. If organizations would seek out the truth to these questions and then create plans to satisfy these emotional feelings, the majority of organizational challenges would vaporize and job candidates would be coming to seek employment. Leadership in organizations’ that are in business sectors where pay is in the lower quartiles or who utilize a high percentage of part-time employees may disagree. While it is true such organizations historically experience a higher turnover rate, this rate can be significantly improved in today’s employment environment by focusing on retention.
An employee in a service industry, for example, moving to a significantly higher (15 percent or more) paying employment opportunity, should be celebrated.
The organization should take some credit for being a stepping-stone in the employee’s positive career trajectory. This outlook should promote others to do the same and serve as an example for wanting what is best for the employee. When an employee leaves to escape the organizational culture, within any workplace, it should drive organizational self-reflection and improvement.
The qualitative side of pay says there is a non-financial value to working within an organization - how someone is treated, the degree of job security, opportunity for growth, sense of responsibility, the feeling of self-esteem, etc. Somewhere there is a shortfall in the value equation. While no one can put an exact price tag on the qualitative side of pay, as each person is different, it is possible to estimate with a good degree of accuracy.
Assume for an example an employee is making $10 per hour, and nearby another organization is paying $10.50 per hour. If the employee feels their current qualitative pay value is worth $1.50 per hour, there is a good chance they will not leave. However, if the perceived value is $0.25 per hour, they may make the decision to leave. The overall worth of the value equation is largely dependent on the culture, environment, and policies of the organization. Pay is only part of the value equation but is most often the focus because it is the simplest part to understand and in the short term the easiest fix.
On a final note related to retention, it is far too common for organizations to lament over the turnover of new employees - especially those who last less than 30 days. There are always excuses why this problem cannot be confronted. “Excuse management” rules many organizations, allowing the self-fulfilling prophecy to be alive and thrive. Yet if new employee retention is a serious issue doesn’t it deserve serious attention? The successful organization will look the problem in the eye, understand it, and begin to countermeasure it.
Tim A. Garrett is a consultant, author, speaker and founder of Diversified Performance Solutions, LLC. DPS was founded on the principles of business ethics, personal integrity and value creation. We welcome the opportunity to work with quality organizations of any size or line of business that want to create positive change to enhance competitiveness and employees’ work environment. Tim can be reached at firstname.lastname@example.org. For more information, visit timagarrett.com