Recent research reveals the cost of staff turnover in Australia is estimated at $3.8 billion in lost productivity with $385 million lost in avoidable recruitment costs. That same research shows that the individual turnover cost is anywhere from a departing employee’s annual salary to 2.5 times its equivalent.
The Australian HR Institute’s 2018 Turnover and Retention Research Report showed an average staff turnover rate of 18 per cent. A comparison shows that the preference for less than 10 per cent churn has fallen from 69 per cent in the 2015 survey to 63 per cent in 2018, suggesting a growing acceptance of higher employee churn levels. Reported turnover in the 26-35 age bracket was 37 per cent and 20 per cent for ages 18 to 25. For older workers it has fallen slightly in the three years since 2015, dropping from around eight per cent to six per cent per cent.
Clearly something is wrong. Underperformance or disenchantment is costing business significantly each year. The bottom line though is, it takes two to tango when it comes to under performance. The answer from management teams seems to be the rather outdated approach of bringing teams together for band-aid team building events that happen maybe once a year.
When numbers and spreadsheets are the focus, dealing with an underperforming team member can feel like an irritation. Palming the responsibility off to Human Resources, is often the solution for busy senior management teams. But this could come back to bite them. Underperformance is often as a result of:
- Lack of training – people need to feel growth and certainty and feel valued.
- Personal issues – poor relationship management missing the signs of personal crisis.
- Wrong fit for role – resulting from initial recruitment downfalls.
- Demotivation – when people are not adequately meeting their needs for certainty, variety, connection, contribution and growth.
- Unclear goals – creating ambiguity, confusion and overwhelm.
- Lack of resources – creating inertia, pressure, stress and burn out.
- Interpersonal conflict – caused by clashes in behavioural styles and underdeveloped emotional intelligence.
- Disgruntlement – around pay, hours, conditions as well as being passed over for promotion.
The real reasons for under performance are rarely uncovered and addressed by management before it’s all too late and their termination is inevitable. The impact of underperformance is never an isolated event and is felt by the individual, HR, the team, management and lowers morale in general. It spreads through an organisation like a cancer. Other staff who are aware of underperformance become irritated and critical of management when management fails to address the situation. And the superficial sticking plaster that is team building, merely adds insult to injury.
A one-day teambuilding day won’t identify or correct deeper issues at play. That only comes through a deeper and consistent understanding of people, a 360-degree approach.
Understanding individual DNA for business is part of the answer – why people do what people do and their dominant thinking style permeates everything. Emotional intelligence (EQ) is also part of the answer. People need to get off “auto pilot” and start understanding what is unconsciously driving their behaviours and actions. Self-awareness, self-management, social awareness and relationship management are four critical starting points everybody needs to be consciously managing.
Steve Gregory, CEO, Black Bull Performance Group
