The common reflex is that high turnover is bad and low turnover is good. It’s time for leaders to rethink their views, and recognize that employees have different chapters in their careers.
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The Great Resignation has put companies on the defensive, anxiously tracking employee turnover data at a granular level to spot worrisome patterns. Turnover is scrutinized by job category, tenure, generation, geography, business unit and ethnicity, and benchmarked against industry peers. Organizations are embracing predictive analytics to identify employees who might leave. Managing these numbers requires a significant investment of time and energy.
Turnover has long been viewed through a binary lens—high turnover was seen as an indicator that something is awry and a low turnover percentage was considered self-evidently desirable. CEOs and board directors ask about it and closely monitor patterns. Low turnover numbers generate a sense of calm and sighs of relief. The slightest uptick can create panic, and often lead reflexively to poorly designed programs or policies to retain or keep people inside the castle.
Given all the talent marketplace dynamics we are seeing, during this time of sweeping changes in the expectations that employees have of their companies and their careers, it is time to fundamentally rethink how organizations view turnover.
A recent Gallup survey of 150 CHROs representing large multinational corporations identified the top reasons employees are leaving:
The greatest workforce planning challenges, the survey found, include competition for talent and burnout/fatigue.
The Narrative Needs to Change
It’s time to accept what many people in our field are now saying—that the war for talent is over and talent has won. This data has put a bright and potentially harsh spotlight on turnover, and it is forcing us to confront this moment. It presents a stark challenge for leaders who are long-accustomed to driving the career-management bus—deciding job assignments, timing of promotions, and where, when and how employees work. Can they surrender a measure of control and successfully navigate the power shift from employer to employee?
This topic is top-of-mind for HR leaders. Earlier this year, a group of 10 CHROs met for dinner in Silicon Valley, and we started a provocative discussion in response to the following questions:
Rethinking our approach to dealing with turnover requires taking on some deeply held beliefs about the ideals and aspirations of organizations. In many companies, the relationship between employer and employee takes on real, perceived or stated familial attributes. Employees are courted, in effect, during an internship or while being recruited. They get engaged when a job offer is extended and accepted. They get married once they start full-time with the company. There have long been expectations, on one side or both, that the relationship would last forever, or at least until retirement. But relationship challenges inevitably arise, and employees decide either to stay and work through them, or leave for a new partner. If they do leave, the partner left behind feels betrayed, hurt and let down.
But leaving one company for another is not a betrayal. Yes, we need to understand the reasons for the departure, in case they point to a bad manager or leader who might drive out other valued employees. But if that’s not the case—if the employee simply is leaving for another attractive opportunity—why not thank them for their contributions?
After all, the reality is that another company often can provide benefits that a current employer can’t, or won’t—whether it’s an opportunity, more money, a bigger job, more desirable location, flexibility or a better boss. The “leaving is bad” narrative needs to change.
A better approach is to make sure they leave with good memories. This will generate goodwill and will influence what they say about the company after they’ve gone. Treat people badly as they exit and it’s highly likely that they’re not going to say good things. You could end up with reputational risk and a narrative you can’t control (especially given the power of social media to amplify a single voice), whereas if you’re gracious and respectful and—hard as this may be to wrap your head around—even happy for someone who’s getting this opportunity, the outcome might be positive.
Kathleen Hogan, Microsoft’s Chief People Officer, and I have spent time discussing the small but highly visible number of Chevron employees who have left for Microsoft. We have recently engaged in unusually collaborative behavior. When a few Chevron employees shared on LinkedIn how excited they are about their new roles at Microsoft after years of learning, growing and working with great colleagues at Chevron, I decided to add comments in which I wished them well and thanked them for their time with the company. I tag Chevron and Hogan, who does a wonderful job welcoming them to Microsoft, especially if I let her know in advance.
They are leaving one great company to join another one. While this feels odd at first, I also know that we are thinking long term about building a community with both of our companies. We are sharing, not competing for, talent. Some of Chevron’s engineers are moving to Microsoft to support their cloud computing, video-gaming and growth-plans strategies, and former Microsoft engineers are coming to Chevron to build digital platforms.
Emotions About Turnover
I stay in touch with many of our former employees and secretly hope one day they will return with new perspectives, enhanced skills and different experiences. Perhaps we will appreciate each other more.
I acknowledge that I have mixed emotions about this. Chevron’s culture and connective tissue is powerful. Our long-term employment model is designed for employees to spend their entire careers at the company. We watch each other’s kids grow up, we live through life’s rites of passage and we grow old together. I use familial phrases to connect our employees. On social media I welcome interns and new hires to the “Chevron family.”
My 18-year-old daughter has known “Mr. Mike” (Mike Wirth, Chevron’s Chairman and CEO) her entire life. It is not unusual for her to ask to say hi to him at the beginning of a video meeting if I am working at home and she knows I have one scheduled with him. It is not unusual for him to ask me “Where’s my friend?” if she has not joined my video and they proceed to have a proper catch-up before our meeting starts. My 18-year-old kid talks to the CEO of one of the biggest companies in the world like he’s a next-door neighbor.
This connective tissue is the reason employee turnover sometimes hurts and feels like a divorce.
But we have to work through those emotions. While we want to keep all the great things about the family, we also need to think about our companies in a new way—that these are teams, and employees have their own dreams, they’re going to pursue them and we’re not going to hold onto them forever. We need a leap of faith, that if we just put a lot of goodwill into the universe, it’s going to come back.
The work family or community is no longer a single employer. We can benefit from talent baton-passing and strengthen the connective tissue even with employees who leave us.
Gaining Experience Earlier
So I shifted from planning to get her to come back someday to simply thinking, “Good for her.”
I have watched former employees blossom and do things that they just would not be able to do in our company for a very long time. Dealing with the board of directors is a perfect example. The only people in the HR function who deal with our board of directors are me and our head of executive compensation. That’s it. But at some smaller companies or startups, you get that exposure. How can I feel bad or guilty because they’re getting this exceptional experience earlier in their careers?
It is better for the progression of talent in general that we stop fighting with each other to keep people, and instead encourage and enable everybody to make progress.
If people leave on a high note, there is a good chance they may come back. I know this, because I am the rare Chevron boomeranger. 2022 is my 28th year with the firm and would be my 31st if I had not decided to get a “divorce” earlier in my career and then “re-marry” my partner after a three-year separation. I left the energy industry for consumer products, worked for exceptional leaders and learned how to graciously treat departing employees in an organization with 50% turnover. (Chevron’s annual turnover, by contrast, is 4.5%.)
Those three years changed my thinking forever. I learned to treat employees not only as consumers of products, but as consumers of culture. The consumer products company had a different employment model compared to Chevron at the time—in exchange for your contributions to the company, you would develop marketable skills, and there was no assumption or expectation that employees would stick around forever. They were ahead of their time.
It’s now time for all of us to rethink long-held paradigms about employee turnover. It’s just one of the many powerful and lasting lessons of the last two years of crisis and disruption.
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