Influencing Voluntary Turnover

Many factors cause employees to voluntarily leave their jobs. Some of these factors managers can influence, and some they can't. For many years, researchers have studied voluntary turnover with a goal of learning how managers can retain their best people while simultaneously encouraging their poorest performers to voluntarily leave. It isn't as easy as it sounds, but recently a professor from the University of Alabama made a discovery which may help.

John Sheridan studied turnover at large offices of six international public accounting firms (the big six). He discovered differences in the atmosphere at these offices that lead to large differences in turnover. Managers and supervisors in other settings may be able to duplicate these factors.

"Atmosphere" refers to a large number of factors in the work environment which define the interpersonal setting, such as emphasis on teamwork and concern for people's feelings. Terms such as "climate," "environment," and "culture" are used to refer to it because it's such a pervasive part of the employment experience. Yet managers largely determined this atmosphere.

Professor Sheridan collected and compared three kinds of information about these six companies: 1) performance ratings for 904, newly hired, professional employees in the tax and audit divisions of these firms (entry-level professional positions), 2) voluntary turnover for this group over a six year period, and 3) a measure of seven factors intended to describe the climate or atmosphere in these firms.

His first step was to compare the factors measuring atmosphere, and he found clear differences between the firms. Two of the firms stood out in factors relating to controlling the work, and three firms stood out in factors encouraging good interpersonal relations. The work factors "stressed values of being highly analytical, with an orientation toward precision," (p. 1043) and carefully following rules and being predictable. The interpersonal relationship factors stressed collaboration and teamwork, and respect for people, especially fairness and tolerance.

Not surprisingly, turnover of these employees was higher in firms stressing careful control of the work. Clearly, firms emphasizing the interpersonal atmosphere provided more comfortable work environments. And when professor Sheridan considered individual performance data, the differences became even larger. Strong performers in firms emphasizing interrelationships stayed about 44 months, weak performers in firms emphasizing careful control of the work state stayed about 26 months. Differences in atmosphere accounted for more voluntary turnover in these firms than any other factor, and for this highly mobile group, this finding is rather startling. In financial terms, it was a $6 million difference between the firms by professor Sheridan's reckoning.

So there you have it . . . A formula to follow to influence voluntary turnover: among your weak performers, emphasize factors controlling the work. Among your strong performers, emphasize factors of collaboration, teamwork, and respect for people. The differences will be subtle, merely a difference in the topics you choose to discuss, and who you chose to discuss them with, but this research suggests it may be a crucial difference.

Your attention and your conversation are powerful influences on the atmosphere for your people. Using these powerful tools to advance your company's interest is what managers are supposed to do.

Reference: Sheridan, John E. (1992) Organizational Culture and Employee Retention. Academy of Management Journal, 35 (5), 1036-1056.
Keywords: turnover, voluntary turnover, supervision, performance feedback

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