The True Cost of Employee Turnover

Turnover has always been a burden on a business
owner’s bottom line. When turnover runs rampant in
the workplace:
Understanding what is causing employee turnover is critical for employers who want to reduce
costs and create an employee experience that will help their business truly differentiate.
Reducing turnover has always been a challenge with no one-size-fits-all solution. However,
in 2019, against the backdrop of a historically competitive labor market and an increasingly
diverse workforce now comprised of four generations of workers with differing needs and
expectations, it’s become especially tricky.
In this book, we’ll take a closer look at multiple industries
to understand the true cost of turnover, common causes of
turnover, how turnover varies by industry, position and
demographic, and solutions for meeting employee needs
and expectations.
What’s important to a
millennial in the foodservice
industry may be different than
what a baby boomer in the
healthcare field wants.
of Service
Employees Lose
The True Cost of Turnover
There are hidden and visible costs associated with employee turnover.
Regardless of industry, turnover can be costly. SHRM predicts that every time a business
replaces a salaried employee, it costs 6 to 9 months’ salary on average. For a manager making
$40,000 a year, that could equate to $20,000 to $30,000 in training and recruiting expenses.
A CAP study took a closer look at how costs vary depending on position within the company.
They found average costs to replace an employee are:
16 percent of annual salary for high-turnover, low-paying jobs (earning under $30,000 a
year). For example, the cost to replace a $10/hour retail employee would be $3,328.
20 percent of annual salary for midrange positions (earning $30,000 to $50,000 a
year). For example, the cost to replace a $40k manager would be $8,000.
Up to 213 percent of annual salary for highly educated executive positions. For
example, the cost to replace a $100k CEO is $213,000.
Visible Costs of
There are obvious and tangible costs
associated with an employee’s departure that
are easy to calculate, track, and anticipate.
These include:
• Recruiting costs
• Onboarding and training costs
• Cost of promoting vacant positions
• Cost of temporary staff to cover open
Hidden Costs of
There are some not so obvious costs that
are not as easy to calculate and which
fluctuate depending on the employee or role.
These include:
• Lost productivity
• Lost expertise and knowledge
• Decreased employee morale
• Increased absenteeism
• Decreased service or product quality
Want to know how much turnover costs your company?
Contact Us to Find Out
Turnover Statistics by Region
The total cost of turnover for a company will depend on how many employees leave an
organization each year. According to the North America Mercer Turnover Survey, US companies
had an average turnover rate of 22 percent in 2018.
More granularly, the Bureau of Labor Statistics, looks at turnover rates by region. From 2014 to
2018, the southern states in the United States have held the highest employee turnover rates of
the nation.
The Western and Midwestern regions of the country alternate holding the second highest
employee turnover rates in the nation, year-over-year, As of 2018, the Midwest stands as second
place for the region with the highest turnover.
However, regardless of geographic location, not all industries are created equally. Some have a
much higher turnover rate than others.

In the healthcare industry:
• Pharmacist: 8.3 percent
• Medical Technologist: 10.5 percent
• Physical Therapist: 10.7 percent
• Radiologic Technologist: 10.8 percent
• Physician Assistant (PA): 14.2 percent
• Bedside registered nurse: 16.8 percent
• Patient Care Tech (PCT): 19.3 percent
• Certified Nursing Assistant (CNA): 27.7 percent
In the retail industry:
• Corporate office: 15.6 percent
• Part-time hourly store workers: 81 percent
• Full-time hourly store employees: 65 percent
• Retail distribution positions: 23 percent
In the hospitality industry:
• Management: 25 percent
• Operational employees (including restaurant
and bar, housekeeping, and front office)
50.74 percent
In senior care facilities:
• Registered nurses (RNs):
Between 55-75 percent
• Licensed vocational nurses (LVNs):
Between 55-75 percent
• Certified nurses aides (CNAs):
100 percent and higher
CNAs in senior care
facilities have
& higher
turnover rates
Causes of Turnover by Demographic
With Baby Boomer employees staying in their careers longer and an increasing number of
Gen Z employees entering the job market, the modern workforce is now comprised of four
generations of workers, each with their own set of expectations.
The nuances of these expectations exacerbate the turnover problem — employers now have
the Herculean task of accounting for all of these expectations if they hope to keep turnover
rates low.
Baby Boomers
According to, most Baby Boomers part with their employers at this stage in their
professional journey because:
Keeping Baby Boomers onboard longer is more likely if an organization offers schedule
flexibility or continued learning opportunities.
Generation X
Research has shown that Generation X looks for organizations that respect
the following characteristics:
• Autonomy
• Independence
• Self-reliance
If Generation X employees feel like they are being micromanaged, or have little say in
workplace decisions, they are more likely to turnover. To keep Gen X around, employers must
cater to individualism and entrepreneurial spirits.
22% leave to care for a
family member or spouse
10% retire due to a lack of
transferable skills
60% leave due to health problems
Millennials are already known job hoppers, as 21 percent of millennials say
they’ve changed jobs within the past year. (This is three times higher than
generations outside of the demographic.)
Understanding millennials’ need for a strong work-life balance is one way to cater to
this demographic.
Generation Z
Gen Z is just now starting to enter the workforce, and many in this age
demographic are working entry-level or part-time jobs to accommodate
schooling, or their current experience level. For that reason, seasonal
turnover, or churn that accompanies entry level positions skew
turnover statistics.
However, we are starting to become more intelligent about the
expectations Gen Z has of employers. For this age group, it boils down to:
• Money
• Job security
• Opportunity to advance
Additionally, according to the guide Get Ready for Generation Z, found that Gen Z job seekers
expect the salary for their first job out of college to be $46,799.
By investing in Gen Z you can be investing in long-term employees who are unlikely to turnover
due to their need for job security and desire to advance.
Research shows that top reasons why
millennials hop jobs include:
• Job lacks growth opportunities and
avenues for leadership development, 67
percent (Bridge)
• Didn’t trust their direct manager (34
• Because their organizations don’t set
goals (31 percent )
• Because their organization thought only
about profits (48 percent )
Further, the top priorities for
millennials when hunting for a
job are:
• Money (92 percent)
• Security (87 percent)
• Holidays/time off (86
• Great people (80 percent)
• Flexible working (79 percent)
• Benefits (64 percent) (Qualtrics)
Is there a common theme to
reducing turnover?
We think so. In our opinion, you can simplify the need of all four generations
into two classes:
(Employees Requiring Income Now)
Employees in this class represent 78%
of Americans who are living paycheck to
paycheck and are financially unprepared for
an unexpected expense.
(Millennials And Gen Z who Get
Instant Everything)
Employees in this class are analytical and
astoundingly adept at accessing information
via technology. They have grown up in a world
where things like money, entertainment, and
transportation can be moved instantly, and as
such they expect real-time feedback in the
technology they use.
Why ERINs need a daily pay benefit
ERINs need simplicity and helpful ways to meet the demands of everyday living. With access to
a daily pay benefit, they are safeguarded from any unexpected expense and can continue to
pursue their financial goals free from setbacks like overdraft fees or resorting to payday loans.
DailyPay provides this by letting employees transfer earned wages instantly at any point in the
pay cycle.
Why MAGGIEs need a daily pay benefit
MAGGIEs are accustomed to tracking progress in real-time, be it steps in a health app or a
car location in a ride sharing app. They also want to be able to track their weekly financial
progress based on the work they’ve performed. DailyPay provides this transparency by allowing
MAGGIEs to track their accumulated wages for the current pay period, so they can see the full
picture and make informed decisions.
MAGGIEs are also heavily strapped with student debt, and having to juggle debt payments with
rent payments and other living expenses means that, at times, they too are ERINs.
Providing a benefit like DailyPay that can meet the needs of ERINs and MAGGIEs can go a
long way to strengthening the employer-employee bond, and increasing the tenure of the
average employee.

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Talent Acquisition – From HR to an Experience Function

Most Human Resources departments in the country, in any industry, are evolving from a tactical, record keeping and reactive mindset to a strategic, business oriented, data driven and pro-active one. Talent Acquisition is no different. While HR is evolving to a business and strategic function, Talent Acquisition is embracing a marketing and experience mentality.

Talent Acquisition
The Statistics
Let’s set the stage with a few facts:

With a 3.5 percent unemployment rate, the United Sates is in full employment. Therefore, Talent Acquisition comes to the plate already two strikes in. Retention is the only way to win as finding great people is extremely tedious.
There is twice the number of Boomers retiring compared to the number of Millennials or Gen Z entering the workplace. That means the current employment landscape conditions are not going to get any easier. Technology and efficiently increasing productivity will be key to closing the gap.
The experience economy is morphing the way the business world is operating. The best and more profitable organizations all have one thing in common, creating an amazing customer experience. Disney, Amazon or Apple are only a few examples. If the recipe for success is creating lasting feelings and memories to your customer, the same mindset needs to be embraced by Talent Acquisition. In the end, the very first impression of any job seekers about your organization comes from the work of the Talent Acquisition team (career site, application process, screening, interviews, offers, background checks, hand off to onboarding, etc.).
We are now at about 80 percent of all the workforce as passive job seekers. This will change to close to 100 percent in the next five years highlighting the importance of not only retention but also positive internal movement.
We now live in a world of immediate gratification. You have a question? Google or Siri can provide the answers in a matter of seconds. It’s date night and you snap a nice picture of your spouse or that amazing crème brulée cheesecake? You can see in real time the reaction from all your social circle by either “likes” or “comments.” In this world, time is of the essence. Time is experience.
Want to know more about Talent Acquisition? Check our our guide for HR.

So what are the necessary changes for a Talent Acquisition department to be not only successful but efficient and maximized?

Revamp your talent acquisition consultant (TAC) persona. The perfect recruiter doesn’t necessarily come from HR. Best TAC from around the country are proactive with a “hunter attitude” (versus farmer), results-oriented with a data-driven mindset, capable of offering best experience, strong continuous improvement approach, and superior teamwork and multitask skills. Common roles with this profile would be sales, marketing, customer service, business, etc. – not HR. There is a big difference between an HR professional that understand sales or business versus a sales professional that can understand HR. It is much easier to teach a businessperson Talent Acquisition than to teach a Talent Acquisition individual how to be great at business, understand data or sales.
Revamp your Talent Acquisition metrics. Time and speed are of the essence, not days to fill. There is a major difference between how responsive you are to every applicant at each stage of the recruiting process and how fast you fill a position. The former is adapted to the need of this employment market and enhance the chance of a great experience for the applicant. The latter only measures speed to fill with no regards to the quality of the new hire nor the quality of the TAC. The article, “On the Folly of Rewarding A, While Hoping For B,”[1] best illustrates the danger of only measuring days to fill.
Measuring ratios like time to respond to an applicant, number of resume routed per interviews or offers, time between routed to interview (or interview to offer) or first 90 days turnover is more representative of the overall quality of the TAC work and what was experienced by the applicant.
Identify and understand every crucible touchpoint your applicant will have with the organization before the first day and intentionally enhance their experience. How much do you know about how an applicant feels at any point of the recruitment process not only about your Talent Acquisition department but your organization, too? Examples of talent acquisition crucible moments are visits to career sites, ease and speed of applications, strong connection with the TAC at the screening stage, easy and swift interview scheduling, the interview itself with the hiring leader, the offer, and the preparation for the first day and onboarding. And again, the time to move the job seekers through all those stages is crucial, not days to fill…there is a big difference.
Embrace technology as much as your budget and bandwidth can allow you. Simple career site, one button application, text recruiting, video recruiting, video job posting, AI applicant mining are only examples of technologies that would increase not only the applicant experience but save some precious productive hours of your TAC giving back to them productive time!
WEBINAR: Acquiring Talent with an Employee-Driven Employer Brand

In Summation
As stated already, Talent Acquisition is stepping up to the plate with two strikes which makes retention the way to win for any organizations. That said, the experience of any employee starts with talent acquisition increasing dramatically the significance of the department. As per the experience economy, morphing from an HR function to an experience one is key for sustainability. Looking into the disruptive, transformative but very necessary upcoming talent acquisition changes, I can’t help but point out that the function absolutely has to report to someone that:

Embraces the direction Talent Acquisition needs to take
Provides the necessary attention and resources to be successful the right way.
Is as business-, experience- and marketing-oriented than them.
Talent Acquisition is not HR anymore but an Experience function.

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Three Reasons Why Restructures Fail And What To Do About It

Nike is undergoing an executive shakeup, and Bob Iger is leaving Disney. Expedia is cutting 3,000 jobs, and Makoto Uchida – the New Nissan boss – is slashing pay and driving profound restructuring.

Disney CEO Bob Iger Speaks At The New York Economic Club
NEW YORK, NY – OCTOBER 24: Bob Iger, chairman and chief executive officer of The Walt Disney
Nissan Motor’s new president and CEO Makoto Uchida speaks during an interview with AFP
While these changes might improve these businesses in some ways, they’re likely to be detrimental to the employee experience – because leadership shakeups and redesigns are naturally fraught with stress and uncertainty – increasing disengagement, decreasing productivity, and reducing company culture.

Consider the 64 percent of employees already looking for a new job this year, according to Achievers’ recent Employee Engagement and Retention report, and the 21 percent that believes leadership quality is a significant variable of employee satisfaction. Coupled with $2.9 million per day organizations spend looking for new talent and the 45 percent of employees who feel leadership isn’t committed to improving culture, to remain competitive and profitable there needs to be greater emphasis on leadership’s role in culture building – especially in times of executive departures.

Employee Training And Development: Investing In The Future
When restructures negatively impact an organization’s performance, one of the most common underlying causes is a lack of alignment between the culture of the workforce and the residing core values. In other words, it’s critical to get culture in order or risk disengagement during a leadership transition, which in turn can lead to reduced employee experience and increased employee churn.

Culture is one of the biggest drivers of business performance – it’s a living, breathing entity; it’s not static and therefore needs to be well managed – just as leaders manage any other aspect of their organization.

During times of change, culture can and should be the glue that holds an organization together, rather than a risk factor that results in poor business outcomes. Tending to the health of organizational culture and ensuring that it is adequately aligned, increases the likelihood that an organization will be resilient to change, whenever it occurs.

Natalie Baumgartner, Chief Workforce Scientist at employee engagement company Achievers and Member of the Forbes Human Resources Council, identifies the importance of fostering and promoting a positive and engaging culture, especially during times of massive change.

“Leadership can demonstrate a commitment to organizational culture and climate by reinforcing company values and recognizing those who activate it across the organization,” says Baumgartner. Thus, leaders need first to understand that whether or not they manage it, their organization has a culture. To demonstrate that they’re committed to cultivating an environment that inspires employees to do their best work, leaders must epitomize the values their company is selling to both current and potential talent. So if employees are to feel valued, heard, and understood – in other words, engaged – the business must ensure alignment between their unique company core values and the values of the people that make up their workforce. Employees desire companies that support and believe in the same principles that they do and one that’s invested in recognizing them for their contribution and commitment.

One of the most powerful tools that exist for driving culture alignment is the regular recognition and promotion of culturally aligned behavior. Research demonstrates that establishing a culture that is rooted in recognition increases engagement across an organization because employees know what’s essential to the company and feel appreciated for acting in ways that uphold those core values. What’s more, recognition is a democratic process that’s open to every employee. Companies aren’t required to have formal methods in place. They can encourage everyday recognition behaviors such as stopping by a colleague’s desk to let them know they are valued or sending out a team-wide email recognizing the achievement of a shared goal. The act of recognizing is available to everyone and has an outsized impact on engagement.

“Feeling valued is essential to engagement at work,” says Baumgartner. Achievers recently released a report which found that feeling undervalued is the second-highest factor hindering participation. Consider the astounding statistic that 30 percent of employees feel “undervalued and underappreciated” by their leadership. 82 percent of employees wish they received more recognition with the reality that a lack of gratitude – it’s the third most essential factor employees consider when deciding whether to stay or leave a company – thus it becomes clear that consistently providing culturally aligned recognition is a critical best practice for retaining talent during times of change.

“Change is the new normal in the business arena, and shifts in senior leadership are happening within organizations every single day,” says Baumgartner. Culture alignment is one of the most potent tools organizations can employ to build resilience to withstand the inevitable upheaval that occurs during these transitions. There is no better tool to achieve that alignment than the regular recognition of culturally aligned behavior. Fostering a culture comprising values aligned with both the company and its employees – and then continuously reinforcing those values through thoughtful attention, sets an organization up for robust resilience during times of change.

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Performance Management Might Change But It’s Not Going Away

If there was one term that dominated the workplace conversation in 2016 it was the “performance appraisal.” That’s okay. I think it’s good to re-evaluate traditions. The performance review hasn’t changed for decades. It’s long overdue.

performance management, method, performance, culture, process
That being said, there are some pieces of the performance management process that still perform a valuable function. In fact, it possible that there’s nothing wrong with certain components of performance management…except that we’ve strayed away from using appraisals in the way they were intended. So, like many things, maybe we need a little refresher to get back on track.

We talked about performance management quite a bit on HR Bartender. Here are some of the most popular posts on the topic. The titles alone remind us there’s some good to be found in performance management.

Performance Reviews Are a Process – Not an Event

Is it possible that we aren’t looking at performance reviews the right way? Rather than viewing them as an event – they should be seen as a process.

Managers Must Be Able to Identify Employee Performance

To manage well, managers need to be knowledgeable about employee performance. They need to know what good work is. Effective performance feedback is key.

5 Ways to Keep Performance Reviews from Becoming Boring

Performance reviews have risen to the top of the hate list for most businesses. Could we do them better? Maybe – here are 5 ways that may help.

Transforming Performance Management for Increased Agility

Today we know the importance of agility. The message from SilkRoad is getting performance management right shows big results for increased agility.

Are Learning Goals Better Than Performance Goals

Workplace goals are important. But, are learning goals better than performance goals? We need to know the difference and why we are setting them.

Your Employees Want Quality Recognition

Managers can praise too much. When it comes to recognition, employees want quality over quantity. That was the results of our recent HR Bartender poll.

Performance management will continue to be a significant topic in 2017. Organizations need to align their performance management processes with company culture and business strategies. That’s critical for attracting and retaining talent and for overall business success. It doesn’t mean turn the process on its head, but it’s time for performance appraisals to meet the needs of today’s workplace.

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Employers: Here Are Four Tips To Minimize Hysteria During A Crisis

Times of crisis can be the make or break of leadership. The Coronavirus, also known as COVID-19, is spreading rapidly across the world. Anxiety and emotions are at an all-time high right now as the pandemic impacts every area of our lives. The uncertainty of the future for businesses, jobs and our health is terrifying.

Many companies have shut down while others are shifting to remote work. This has created a new set of challenges for both new and tenured managers who have never led remotely before. A new survey released by VitalSmarts found

1 in 5 leaders are unprepared to manage a remote team
21.9% of employees don’t feel their team members have good enough collaboration habits to work effectively from home
This pandemic-driven plunge into a digital transformation will expose the flaws in policies, poor leadership skills and test the strength of company cultures. On the other hand, employers who were once resistant to remote work will see the benefits and possibilities of it. COVID-19 is forcing companies to re-evaluate their shortcomings especially when it comes to their communications in times of crisis. It’s crucial leaders are mindful when approaching and engaging in sensitive topics like COVID-19 to avoid feeding into the hysteria.


Three Simple Techniques To Quickly Fix Employee Burnout

When someone is so exhausted that they don’t care about things they previously considered important, they’re burned out. Burnout is not having “a case of the Mondays” or the occasional bad days we all experience; burnout is a deeper loss of optimism and resilience.

And while it might seem like burnout is unrelated to your company’s bottom-line, if your goals require that employees give maximum effort this year, you need to stop employee burnout (and any loss of optimism, resilience, etc.).

For example, in the recent study, Employee Engagement Is Less Dependent On Managers Than You Think, we discovered that optimistic employees are 103% more inspired to give their best effort at work. And if employees aren’t giving their best effort, there’s little chance that any company survives a turbulent economy.

Fortunately, there are three straightforward and practical techniques you can employ today to halt, and even reverse, the vast majority of employee burnout.

Today In: Careers

Technique #1: Intervene Quickly And Directly

One of the first signs of burnout is frustration. When employees are irritated by seemingly trivial issues, especially when that frustration is expressed multiple times and in public venues, you’re typically witnessing early stages of burnout

If I roll my eyes in an unproductive staff meeting, that’s not burnout. But when an ordinarily agreeable employee starts muttering loudly, “this is such a pointless waste of time,” in two or three different meetings, that’s a likely indicator of looming burnout.

And those are indicators you want to catch and address quickly. If you engage that employee while they’re still in the muttering or griping stage, there’s a good chance you’ll halt, and even reverse, the inchoate burnout.

Unfortunately, many leaders brush aside, or ignore, the muttering. In the study The Risks Of Ignoring Employee Feedback, we discovered that only 23% of people say that when they share their work problems with their leader, he/she always responds constructively.

But it doesn’t take much effort to successfully engage with a frustrated employee. Simply ask them two questions:

Could you tell me about a time in the past month when you felt really frustrated?
Could you tell me about a time in the past month when you felt really motivated?
And after you’ve asked your employee those two questions, sit quietly and listen. Don’t dismiss their responses, don’t defend yourself or the company and, most importantly, don’t argue with them. Just calmly listen and acknowledge what they’ve said (both the good and the bad).

From the employee’s perspective, knowing that your boss hears you, and is earnestly trying to empathize, is a form of social support. And research shows that social support can significantly diminish burnout.

Technique #2: Help Your Employees Problem-Solve

It’s pretty common for burned-out employees (and leaders) to experience diminished problem-solving skills. In fact, any stress can potentially erode a person’s ability to think clearly, rationally and generate alternatives.

When you see your employees struggling to solve problems that seem pretty simple, it should be a warning sign for looming burnout. And in those cases, you’ve got two easy options. First, help them calmly and rationally dissect the problem and then serve as a sounding board. This can be as simple as asking the employee to describe the problem they’re facing, and then ask them questions like:

Tell me about what steps you’ve taken so far?
What are you thinking about doing next?
How is that the same or different from what you’ve tried before?
If Plan A doesn’t work, what might be a good Plan B?
These questions have been shown to deescalate catastrophizing and, in a very gentle way, encourage employees to reengage the critical thinking parts of their brain.

A second option is to simply force the burned-out employee to take a break; sometimes, a little space really is the best solution. An extended lunch break, a day off or time to pursue an outside interest can make a big difference.

Technique #3: Stay In Close Contact

While it can be stressful for leaders to spend time with burned-out employees, it’s critically important to maintain close contact.

The study Optimal Hours with the Boss discovered that people who spend six hours per week interacting with their direct leader are 30% more engaged and 16% more innovative than those who spend only one hour per week.

So devote extra time to interacting with any employee that seems to be heading towards, or is already in, a burned-out state. Set discrete periods of time to check in with employees. Invite them to coffee. Or even pick up the phone for a touch-base chat.

One final thought for leaders: If your employee is expressing signs of burnout, that’s potentially a good thing (especially when the alternative is the employee withdrawing or staying silent). Consider their expressions a way of reaching out and a big sign that they trust you.

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Jack Welch: Managerial Genius Who Made One Disastrous Mistake

Jack Welch was an extraordinarily successful CEO, who in two decades made GE—a legacy company if ever there was one—the most valuable company on Earth, and then lived long enough to see it all fall apart. When Welch stepped down, GE was the envy of the business world and had a reputation for training superb managers and being a giant with the agility of a ballerina. By the time Welch died, the company had become a stunning symbol of gargantuan strategic mistakes and executive incompetence.

But the fall of GE doesn’t diminish Welch’s achievements during his years in the corner office. His failure wasn’t in how he ran his ever-expanding, ever more profitable kingdom but, to be blunt, in who he picked as his successor. This was tragic, as Welch had a number of capable choices, many of whom went on to manage other major corporations. My grandfather, B.C. Forbes, founder of our company, always said that you’ll learn more about a business’s prospects by accurately sizing up its CEO—what he liked to call “the head knocker”—than by studying its balance sheet.

GE’s legendary CEO on Forbes Cover in 1994.
When Welch took the reins in 1981, GE, like the U.S. economy, was tired and underperforming. The company was in scores of businesses; in a sense, it was a mutual fund that also actively managed the operations of its holdings. Welch was a driven, high-energy leader, who shook up GE from day one and never stopped. Being around him was a bracing experience, as you visibly felt his almost superhuman focus and intensity. He was also refreshingly outspoken. I had several chats with him about the Federal Reserve and its belief that prosperity causes inflation, a mistaken notion that Welch ripped into with gusto.

Under Welch, GE remained a multidimensional outfit but one that relentlessly shed underperforming operations, as well as “unproductive” employees. Promising entities and industries were actively pursued. Deals were done at a dizzying pace.

The most notable pursuit of opportunity lay in finance. The booming 1980s and 1990s saw the creation of an array of new instruments to finance new and existing businesses and shake up stodgy, underperforming ones. GE didn’t let its industrial legacy get in the way of aggressively expanding in this arena. GE Capital became a colossus and a profit machine.

Jack Welch was featured as one of Forbes’ 100 greatest living business minds in our 2017 Centennial issue, talking about his greatest mistake. MARTIN SCHOELLER
The booming global economy was a helpful tailwind during Welch’s reign, but make no mistake, GE was at the forefront of events. Its total return to investors easily outpaced the broad stock market. Despite the firings and layoffs, GE’s payroll expanded, as did revenues.

The economic crisis of 2008, seven years after Welch retired, nearly sank GE, because GE Capital was dependent on short-term financing, which just about dried up during the panic that fall. GE Capital had also not been closely or skeptically managed, as other parts of GE traditionally had been. These blunders lay with Welch’s successors.


But there was a bigger mistake. Unlike it had done with finance, GE failed to see high tech as a ripe field with enormous long-term potential so didn’t go for it aggressively and nimbly. Its high-tech forays were too late and stultifyingly bureaucratic.

GE’s story in this century is a textbook example of the fact that in free markets, today’s success doesn’t guarantee tomorrow’s. It’s a lesson that too many people overlook, particularly regarding the seemingly unassailable power and position of our high-tech biggies.

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Create Engaging New Employee Experiences With These 5 Onboarding Strategies

Do you remember the day you first started your job? It was probably a whirlwind of activity: signing forms, meeting colleagues, taking a tour of the building, completing orientation – and, of course, figuring out the coffee maker. You probably also remember clearly how you felt that first day – how your boss treated you, whether your team members were friendly and whether you could find all the information you needed. These early experiences make lasting impressions on new employees, and it’s essential that those impressions be positive if you want to set the right tone for engagement.Our Job Seeker Survey Report shows that onboarding experiences carry long-term impacts for retention as well. Half of new hires say their experience on the first day will affect their decision to stay more than 30 days, and 41% say they would immediately start looking for another job if they had a bad onboarding experience.Setting the Stage for Engagement: Engaged employees get more done, remain with their employers longer, build stronger relationships with customers and become enthusiastic brand ambassadors.During onboarding, you begin building the foundation for these benefits even before your new employees receive their first paycheck. According to SHRM, a strong onboarding program will include:
Compliance – Complete legal and policy related activities such as signing forms and presenting workplace rules.
Clarification – Teach new employees the expectations of their new role.
Culture – Communicate organizational norms within your company.
Connection – Promote connection with peers and managers.
When these four elements are present, your onboarding process has the power to create engaged, productive workers, reduce turnover, increase job satisfaction and promote long-term retention.

But on a practical level, what steps can you take to achieve those goals?How to Engage and Retain New Employees During Onboarding: In addition to dotting all the compliance i’s and crossing all the paperwork t’s, onboarding should also help new employees feel like a valuable member of the team. A warm welcome from teammates and a smooth introduction to the expectations of the new role can promote engagement and retention right from the start.

Here are 5 ways to make the most of the onboarding experience:1. Start Before Day One – Pre-boarding is a great way to help new hires feel excited about the job they have just accepted and give them the resources they need to hit the ground running. Pre-boarding activities may include sending a welcome packet, setting up email, scheduling a welcome call with a manager and providing access to benefits information, an orientation video or an employee handbook.

2. Consider Phased Onboarding – Only 8% of job seekers expect onboarding to take longer than a month, yet longer onboarding times help employees feel less confused and more confident in their roles. Conducting your onboarding process in phases that address different needs and questions over time will give new hires the support they need to do their best work. For example, create 30-, 60-, and 90-day checklists and ask managers to touch base with new employees regularly to answer questions or offer support.

3. Assign an Onboarding Buddy or Mentor – Early social connections help new hires feel more at home in the office, and that’s an important step toward engagement. It also makes it easier for them to ask for help or find answers to questions that arise as they learn the ropes.

4. Incorporate Recognition – The goal of recognition is to help employees feel valued, and that starts even before they show up on Day One. For example, send a welcome packet to a new employee’s home with a handwritten note from their manager, or have other team members sign a welcome card and have it waiting on their desk when they arrive. Look for ways the employee will contribute to your team and let them know you’re excited to have them.

5. Use Technology Strategically – Task alerts, goal-setting software, mobile apps and social platforms can all make onboarding more efficient and reduce frustrations as you connect with your new hires. Still, don’t expect technology to do all the work of relationship-building for you. Personal interactions with managers and co-workers are still essential for helping employees feel appreciated and valued.
Recognition and interaction with colleagues are important at every stage of employment, from the candidate experience all the way through onboarding and beyond. When you build these components into your onboarding process, it matures beyond paperwork and tasks into a foundational strategy that sets your new hires up for long-term engagement and retention.

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How To Cultivate An Employee-Empowered Culture

Empowerment is a buzz term that we hear a lot about in leadership. A culture that embraces employee empowerment, understands the role workers have by taking care of the needs of the customers they serve.

Empowerment is defined as “the giving or delegation of power or authority; authorization; the giving of an ability; enablement or permission.”

Empowerment is based on the belief that employees have the ability – and want to take on more responsibility.

Empowerment is a way to give employees greater authority and responsibility to take care of the needs of the customer and to provide employees with the means for making influential decisions.

Everyone within an organization should be involved in managing customer expectations and improving quality.

Empowered employees understand their role in supporting the vision by taking care of the needs of the customers they serve.

Joseph Juran (one of the early quality gurus) defined empowerment as “conferring the right to make decisions and take action.”

13 Examples Of Employee Empowerment

1. Management support
As with anything that is successful in business, management support of empowerment is critical to its success.

Top management needs to be committed to supporting an employee-empowered culture.

This includes developing an organizational definition of empowerment that may include well-defined boundaries and management training on how to coach empowered employees.

For instance, first-time supervisors may need to be trained on how to support and empower employees to respond to customers.
2. Focus on the customer
Successful organizations understand that it is the customer who pays the bills. A focus on this important group is what makes great organizations.

Employee empowerment should be centered on the needs of the customer.

When employees are empowered to make decisions that help the customer, they are contributing to the strategy and business objectives of the organization.

For instance, if an employee is dealing with an angry customer, they should have the tools and authority to make things right.
3. Front line decision making
Front-line employees get it. They deal with day-to-day issues and know what customers want.

Eliminate the “let me ask my boss” barrier by handing over a level of the decision making power to front-line employees.

This act of delegation may be something as simple as allowing an employee to make service recovery decisions.

For instance, the Ritz Carlton is a classic model for service recovery in that front desk employees are authorized to make things right with a customer up to a certain dollar amount. No questions asked.
4. Ongoing training
A culture of empowerment requires ongoing training.

Employees need to be trained to take on these new customer-focused responsibilities.

Empowered employees may be trained in the areas of customer service, problem-solving, negotiation and conflict resolution skills.

The more tools you give employees the more confident they will be with making those off the cuff decisions that impact customers.
5. Access to data
Data is king and employees who understand company data are more equipped to influence those critical success factors.

Empower employees by giving them access to information and data that can be used in their decision-making process.

This information might include feedback from customer satisfaction surveys or customer comment cards that can help make informed customer-focused decisions.

For instance, if the comment cards share a consistent message that customers perceive employees as being rude, sharing this information will result in employees being more aware of how customers perceive their interactions.
6. Managers trust employees
Delegating decision making can be difficult, particularly for new managers.

However, managers need to have trust and confidence that their employees will make the right decision.

A manager that second-guesses an employee’s decisions can impact an employee’s confidence in their decision making ability.

The fact is employees won’t make the right call all of the time.

When they miss the mark, take the opportunity to coach and mentor them on a more appropriate response.
7. Boundaries are clearly defined
Employees need to understand the expectation and boundaries for decision making.

They should understand what that means in terms of their authority in any given situation.

For example, an employee may be given the authority and be empowered to correct a customer issue up to a certain dollar amount.
8. Employees have mentors
Mentors benefit everyone! Employees should be assigned a mentor to ask questions or give directions.

Mentors should be someone who has successfully done something that the employee is learning to do.

For example, if an employee is learning to be empowered to perform service recovery, their mentor should be someone who has learned the critical thinking skills to assess different situations and come to reasonable conclusions.
9. Employees receive positive reinforcement
We all make mistakes when we first begin making decisions so it is important to provide good coaching and positive reinforcement.

We have all been there and can relate to an employee who hesitates to make a decision for the first time.

As employees develop their decision-making skills, the coach with positive reinforcement as they maneuver the varying real-life scenarios.
10. Align compensation with customer needs
It is important for employees to understand how what they do is tied to their compensation.

Align performance expectations around customer requirements and use the performance appraisal process to tie it to employee compensation.

This reinforces an employee’s motivation to make the right decisions.
11. Consider social style
There are people who are good with people, and there are people who are better behind the scenes.

Use social style testing and make sure you have the right personalities doing the right jobs.

Assess social styles to match natural employee strengths with job responsibilities.

Use the DISC or Myers Briggs assessment tool to help identify employee strengths.

Then, put employees in roles that complement their strengths!
12. Give employees the tools they need
It is difficult for an employee to write on a piece of paper without a pen and it is difficult for employees to do data input if their computer is broken.

Some employees are very vocal about their needs but others will work with aging or broken equipment and never speak up.

Give employees the tools and equipment they need to do their job. Fix broken equipment as soon as possible and look for ways to improve what the employee has to work with.

A commitment to assessing changing technology and equipment should be part of an organization’s strategy to support empowered employees.
13. Plan for empowerment
As they say, if you fail to plan, you plan to fail.

Creating an environment to empower employees requires focus and planning.

Create a plan to foster a culture of empowered employees.

Implementation should have a timeline and all aspects of the plan should be written so everyone understands the timing and process of implementation.

Organizations with strong empowerment models show that productivity and customer satisfaction improves as a result of an empowered culture. So why wouldn’t you empower employees?


Six Trends Shaping Future Leaders

Over the past 16 months I interviewed over 140 CEOs around the world from companies like Audi, MasterCard, Unilever, Best Buy, Oracle, Kaiser, Verizon, and dozens of others. This was all done as part of research for my new book, The Future Leader, which examines what it will take to be a leader in 2030 and beyond. One of the questions I asked all of these CEOs was around the greatest trends shaping the future of leadership.

These are the six trends that identify what will play a major role in shaping future leaders over the next decade and beyond. It’s true that we are seeing these in action today but over the next ten years they will be front and center.

6 Trends Shaping Future Leaders
Leadership Trends
AI and Technology
When I asked CEOs what they viewed as the biggest trends impacting leadership, the most common answer I received was the growth of artificial intelligence and technology. It’s no secret that technology is evolving at a breathtaking pace. Artificial intelligence has the power to completely transform how businesses operate and people work. But with the excitement of AI and new technology comes fear and uncertainty. It’s up to leaders to assuage those fears by looking for ways to implement AI that adds to employees instead of replacing their jobs. Leaders need to calm fears and remain positive about new technology. They need to be well-versed on AI and experiment with new technologies so they can help others understand the potential impact on their jobs.

As Christian Ulbrich, the CEO of JLL, one of the world’s largest commercial real estate firms with almost 100,000 employees around the world told me. “We will succeed in the digital era only if we engage with enthusiasm and welcome the ideas and opportunities that digital tools, data analysis, and new technologies will bring.”

Pace of Change
Right alongside the growth of AI and technology is the overall pace of change. How we live and work is drastically different today from what it was five years ago—let alone 20 or 30 years ago. Change surrounds us in the form of climate change, globalization, diversity, and dozens of other things. Change is constant and has always happened. What’s different about today is the rate at which change occurs. To be successful, organizations must be constantly looking forward, and leaders must lean in and embrace change instead of shying away. Future leaders need to be agile, easily adaptable, and comfortable challenging the status quo.

Purpose and Meaning
While companies used to be able to easily attract top talent with the promise of a high salary, that’s no longer the case. Employees now want to work for an organization that offers purpose and meaning, and they’re even willing to take a pay cut to get it. Purpose is the reason for an organization’s existence and often includes things like investing in employees, making a difference in the world, or driving innovation. Meaning is the personal impact of each employee’s work. Employees want to see that their efforts are impactful and contributing to the overall purpose of the company. To set the example, leaders must first understand their own job, purpose, impact, and meaning before helping their employees do the same. They need to get to know employees individually to understand what motivates them.

Before he passed away suddenly, I had the opportunity to speak with Bernard Tyson, the former Chairman and CEO of Kaiser, which is one of America’s leading healthcare providers that employees over 200,000 employees. He told me: “Companies of the future can no longer think that they can just exist … significant companies of the future cannot just exist in this little bread box, in this isolated place. We are a part of greater society and a greater society is a part of us. I think the trend of when and how we engage in the bigger societal issues will continue to be a part of the future of leadership.”

New Talent Landscape
Recent years have brought tremendous change to the overall talent landscape, and it’s only just beginning. As older employees retire and younger generations enter the workforce, many companies find themselves on the constant hunt for skilled employees. At the same time, diversity and inclusion are becoming even more important. The new talent landscape is more than just changing demographics; it’s a new approach to attracting and retaining talent while also training and upskilling employees to be prepared for the future of work. Leaders of the future should strive to develop diverse teams and create an inclusive environment. They need to invest in upskilling employees while also finding ways to involve older employees and motivating employees of all ages to take control of their own career development.

Morality, Ethics, and Transparency
Gone are the days of controlling leaders trying to be the smartest person in the room. A recent push for morality, ethics, and transparency has led to more authentic and humble leaders. Companies with ethical foundations perform better financially and have higher customer and employee satisfaction. These types of organizations are created by moral leaders. At the same time, leaders are being put under a microscope as people demand transparency. Leaders can no longer hide behind their title—they must be open and honest to their companies and the public. Leaders of the future must determine their own moral compasses and have a strong sense of their personal beliefs. Simply standing still is no longer good enough; leaders need to take a stand and be as transparent and authentic as possible.

As technology grows, the world becomes more connected and seems smaller. Each country used to be its own economy, but now we can work with and communicate instantly with people all over the world. All businesses are now global and have the potential for worldwide employees and customers. Globalization brings complex geo-political issues and great opportunities to collaborate and share cultures. Future leaders need to embrace globalization by becoming global citizens who appreciate different cultures and know how to communicate across cultural and language barriers. Foreign ideas should be viewed as opportunities, not fear-filled challenges. Leaders of the future need to pay attention to global issues and understand what is happening around the world.

Future-ready leaders need to understand trends and adapt their leadership approach for changes in the way we think, work, and live. These six trends will be crucial for leaders in coming years.

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