The ability to attract and retain high quality people to an organization is one of the most important challenges facing a leader. The people working in an organization are the most critical aspect of a capacity plan.
In 2021, the overall turnover rate per the Bureau of Labor Statistics Report was 57.3%. Digging further into the numbers, the turnover rate drops to 25% when you remove voluntary turnover, and 29% if you remove involuntary turnover. With respect to high performers, the turnover rate was 3%. 2022 is your game changer year.
Turnover is a huge cost in terms of capability, institutional knowledge, onboarding, customer relations, and teamwork. Before the pandemic, in the professional services industry, a turnover rate of 10% was considered ideal.
What is your target turnover rate and what can you do to achieve that rate?
There is no silver bullet available to guarantee a superior process to attract and retain good people. The most effective process involves many distinct factors all based on authenticity, leadership commitment, and team development.
A good starting point for attracting and retaining high quality people is to evaluate your existing process. For example, do you believe in having spare capacity to achieve growth or believe lean is better? Do you invest in career plans, provide coaching, and practice blameless discernment in performance reviews? How do you select the recruiting team?