Proactive Strategies to Keep Your Best Talent

As an organizational behavior professor, I have dedicated years to studying the dynamics within the workplace, particularly the costly issue of employee turnover. It's a well-established fact in the business community that turnover is expensive, not just in monetary terms but also in lost productivity and morale. Therefore, it's imperative that people strategy leaders shift their focus toward more effective methods of preventing turnover.

What We Do Now

Historically, organizations have relied on exit interviews to understand the reasons behind employee departures. However, this method is inherently reactive; by the time the information is gathered, it's too late to retain the departing employee. Furthermore, the insights from exit interviews rarely influence strategic decisions, as they are often viewed as isolated incidents rather than indicative of a broader trend.

Similarly, previous attempts to employ listening and engagement tools have fallen short. Although helpful for getting a pulse on employee engagement, the fact that the data are aggregated to the organization level or team level makes it challenging to identify specific individuals at risk of turnover, obscuring the outliers among a generally content workforce. I’ve talked to several people strategy leaders who seem frustrated with these approaches. They consistently state that they know that these preexisting approaches are incomplete, but they are not sure what to do differently.

The crux of the problem lies in our delayed response and the generalized approach to understanding employee dissatisfaction. To prevent turnover, we must recognize the signs well before an employee decides to leave. Herein lies the potential of two untapped methods that could upgrade our approach to retaining talent.

Two Preventive Approaches to Turnover

First, organizations can predict the likelihood of employee turnover by monitoring changes in behavioral engagement at work. Thanks to advancements in technology, employees can now track communication patterns across tools such as Teams, Slack, and others, offering insights into employee behavior. These patterns can reveal who is overworked, disengaged, or losing interest in their work. By identifying these changes early, managers can proactively engage with affected employees to explore potential solutions and, in turn, prevent possible turnover.

Second, and perhaps more crucially, focus on the quality of employee-manager relationships. Traditional engagement surveys over-index individual-focused predictors and under-index addressing other-focused predictors. In particular, meta-analytic findings illustrate that leader-member exchange (LMX)—which is characterized by support, trust, and mutual respect—is an incredibly strong predictor of an employee's likelihood to stay with an organization. Along those lines, organizations should go much further in not just training managers and leaders on the basics of delegation and how to conduct a performance review. Instead, they should be giving employees tools that allow managers to form high-quality relationships grounded in empathy, perspective-taking, and complementarity.

Turnover Prevention in Practice

The practical takeaways for organizations are clear. First, we must adopt a preventive mindset rather than a reactive one. Waiting until an employee hands in their resignation to understand their dissatisfaction is too late. Second, leveraging "digital exhaust" from communication tools can provide early warnings about employees at risk of turnover. This predictive approach allows for timely interventions that could make all the difference. Third, it's vital to equip employees and managers with tools and strategies that focus on building high-quality relationships.

Employees are our most precious—and expensive—resource. The direct and indirect costs of replacing them underscore the importance of retaining talent. By shifting our focus to preventive measures, leveraging technology to predict turnover, and prioritizing the employee-manager relationship, we can create an environment where employees feel valued, supported, and engaged. In doing so, we invest in not just the sustainability of our workforce but also the overall health and success of our organizations. It's time to invest in ensuring our employees want to stay, recognizing that the future of our businesses depends on it.