Turnover Is A Cancer That Must Be Eliminated


by Ron Roberts
The Contractor's Business Coach

Did you know that turnover is the most expensive invisible cost contractors suffer?

How does turnover cost you money? Let us count the ways.

1. Lower productivity.
2. Lower quality.
3. Missed deadlines.
4. Time wasted interviewing.
5. Time wasted processing the paperwork.
6. Time wasted training new employees.
7. Poor customer service.

Now, I am not talking about the type of turnover you create when you jettison a bad worker. That’s pruning and it should be done.

The turnover I am talking about, the turnover that is stealing you blind, is the turnover created when your good employees walk out the door never to return.

Think about how hard it is to find good workers, union or non-union. If finding good workers is so difficult, how can you afford to lose the ones you've got?

Even time a good worker walks out your door you should imagine dollar bills on fire. When one of your good workers leaves, a little bit of your profit walks right out the door with him.

How do you solve the problem? Become an employer-of- choice.

An employer-of-choice is a company that employees are eager to work for. An employer-of-choice gets his pick of the litter when it comes to hiring workers. Rarely
do good employees walk away from employers-of-choice.

What makes a company an employer-of-choice?

1. Management respects the employees.
2. Management has realistic expectations of employee performance.
3. Management sets employees up for success.
4. Management holds non-performers accountable.
5. Management pays employees fairly.
6. The sales staff keeps the backlog full of good work.

Since turnover is a sign of extremely unhappy employees, have you ever considered where there is high turnover, there probably remains behind a bunch of unmotivated
employees. These employees are picking up paychecks without producing any significant work.

Solving the turnover problem often solves the low productivity problem. The two go hand-in-hand. For that reason, employers-of-choice usually end up with highly motivated and highly productive crews.

I know of a couple of contractors in town who have over 100 field employees each and lose less than one employee a year to voluntary turnover. Would it surprise you to learn that both of these companies have incredibly productivity crews?

Here’s another interesting tidbit. Employers-of-choice almost never pay above market wages.

Recent studies have shown that employees will join and stay with companies viewed as employee-friendly even though they could get 10% more working for another company.

There's a deal that's hard to pass up. Imagine having crews that are more productive yet work for lower wage rates than your competitors.

Turnover is a cancerous problem. Unfortunately, most contractors choose to live with the problem instead of investigating and solving the problem. That’s a very expensive mistake to make. Try not to.

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