8 Surprising Ways to Reduce Unwanted Turnover

Episode #404 8 Surprising Ways to Reduce Unwanted Turnover

TURNOVER MAY NOT BE WHAT YOU THINK IT IS 

There’s a pithy quote for every occasion in leadership. I can just visualise opening my fortune cookie and reading the quote, “People don’t leave organisations, they leave managers.”

Staff turnover is still widely misunderstood. And most leaders operate from a place of fear, responding to it defensively.

They tiptoe around their people, lower the standards, and tolerate poor performance so they don’t rock the boat. But, ironically, this is the worst thing you could possibly do for your retention problem. 

The real issue isn’t turnover. It’s the undesirable turnover that occurs when you lose the very people you can least afford to lose. And the team you’re left with is full of tourists who are just along for the sightseeing.

In this episode I give you my views on how to frame the turnover problem… I look at an article from Harvard Business Review that confirms what great leaders have always known. And I give you a practical framework that you can implement: four things to stop doing and four things to start doing.

Get these right, and you won’t just reduce undesirable turnover: you’ll create an environment where your best people double down on their effort and commitment, and the ones who shouldn’t be there finally work it out, and find another team to drag down.

NOT STRETCHING PEOPLE HAS A COST

When staff turnover is a problem, it pushes many leaders into a defensive mode. I see this regularly, all the way from CEOs down to front-line team leaders. They start to operate from a place of scarcity; their focus shifts; and instead of building what they want, they try to protect what they’ve got.

Even if what they’ve got is… pretty ordinary! 

With this ultra-conservative approach, a lot of things can go wrong, and it ends up being a self-fulfilling prophecy. When you’re defensive, you tiptoe around your people, for a variety of reasons: maybe you’re afraid that they’ll burn out and you’ll be left short-handed; maybe you’re worried about HR violations and bullying claims; or maybe you think that it’s critical to have someone in the role, even if that someone isn’t performing well.

The good news is, whatever you’re thinking, you’ll be able to justify it to yourself pretty easily: we humans can rationalise pretty much anything.

How many of you have caught yourselves saying in the last 6 to 12 months:

• My hands are tied, because I’m not allowed to get rid of staff;
• I have to keep my team happy or they won’t do what I ask them to;
• It’s too risky to take this person down the performance management path, because they’ll just go out on stress leave; and
• I can’t really do anything because I won’t get the support from above.

All of which might be true… but whatever the justification, the outcome is the same. You choose not to stretch your people; you let them set the tone, the pace, and the standard; and you convince yourself that you’re keeping an equilibrium… which is probably true!

But don’t underestimate the consequences of not stretching your people:

• Your team’s capability becomes continually weaker (because people aren’t growing);
• The standard drops (because expectations are lower);
• The workload skews to the highest performers (because the work still needs to get done);
• Those same high performers get sick of doing the heavy lifting (because they watch tourists getting paid the same as they do);
• You experience an increase in undesirable turnover (that’s the type of turnover where someone leaves, who you wish had stayed);
• Your gene pool is weakened, (because for every top performer who leaves, there’s a poor performer who’s dug in like a tick); and
• Everyone in between feels the gravitational pull to the bottom (because that’s the direction and the momentum of team culture)

Have you ever seen this happen? If not, you will… it’s more common than you might imagine

WE’RE CONDITIONED TO KEEP PEOPLE HAPPY

We’ve been conditioned to believe that happy workers are productive workers; that simply by letting people do what they want, they’ll somehow appreciate it and work harder. This is so convenient, because as a leader, it means you don’t have to do anything difficult: like holding people accountable for their choices.

But the only thing I’ve ever seen it do is breed resentment and entitlement in the people who are given everything for nothing. This is why the secret to reducing undesirable turnover is a little counter-intuitive.

Remember, turnover by itself doesn’t tell you much, unless you look at the two different categories: desirable turnover and undesirable turnover:

• There will always be people who choose to leave, who you wish had stayed; and
• There will always be people who choose to stay, who you wish would leave!

I was always focused on targeting the right turnover. I wanted my undesirable turnover to be as low as possible, and I wanted my desirable turnover to be as high as possible.

I get asked occasionally what a good turnover figure is. For example, is a 15% turnover rate good or bad? Well, of course, it depends. If 14% of that is desirable turnover and only 1% is undesirable turnover, that’s awesome.

But if it’s the other way around, and the vast majority of that 15% is people you wish you’d been able to keep, then you’ve got a serious capability problem.

Unless you think in those terms, your gene pool will naturally become weaker over time.

The next piece will likely be very important to you. I’ll give you the psychological frame that’s going to help you to shift your focus from keeping people happy to stretching them for success.

It was over a century ago that the Yerkes-Dodson Law first described the relationship between stress and performance. The research showed that as you increase stress on any given task, performance improves. Obviously, once that stress becomes too much, performance starts to decline.

But you can’t perform optimally, without at least some level of stress.

What I learned over my years of leading people was this: not only is that stretch necessary for performance, but it’s the thing that actually drives motivation.

The older I get, the less certain I am about practically everything. But there’s one thing I’m pretty sure about: All self-esteem comes from achieving difficult things.

Just have a think about this. When was the last time that you felt absolutely unstoppable? Invincible? Bulletproof? I can virtually guarantee that it was just after you’d done something hard: something you thought you might not be able to do; something that scared you; something that pushed you to your limits, either physically or mentally.

Without that stretch, and without a little risk, there’s no satisfaction at the end. When you stretch someone, a number of surprising things happen: the high performers are challenged and thrive; the low performers are challenged and leave.

No one likes working in an environment where they can’t be successful. Even the poor performers will self-select!

Which is awesome, right?! It’s  an automatic increase in your desirable turnover. And once the high performers see that you’re serious about upholding a high standard, they double down on their own commitment.

As a leader, I always felt it was my job to give someone the opportunity to stretch. Some wanted to, and many didn’t. But those who stuck it out ended up with incredible motivation; their job satisfaction was through the roof; and, ultimately, they had stellar careers.

But that doesn’t just happen organically. It takes a leader who cares enough to stretch their people.

INSIGHTS FROM HARVARD BUSINESS REVIEW 

I’ve been banging this drum for a lot of years now, and it’s something that many leaders simply don’t want to hear.

Why? Because if they believe this, it means they have to lead their teams very differently from how they are leading them now.

This is why it was so gratifying when I saw an article in Harvard Business Review this month. It was titled Surprising Ways to Reduce Turnover in High-Pressure, High-Skill Jobs. I’m going to paraphrase this article, including a few direct quotes, for ease of conveying the messages.

The article looks at turnover rates in the US hospital and health care system.

In 2024, more than 287,000 staff nurses left their positions, and nearly 1.6 million say they intend to leave within five years. In a field already facing staffing pressure, turnover can cause critical shortages.

Conventional wisdom tells us that nurses are overworked and burned out, which might be true. But, as the article points out, it’s also incomplete.

Their research paper, titled, Operational Overload: The Impact of Workload on High-Skilled Workforce Attrition confirms that overtime and the emotional toll resulting from adverse clinical events increase the likelihood that nurses will leave.

But there is a more useful insight. Not all job demands push people out; some actually pull them in. The learnings don’t just apply to nursing, but to other high-skill, high-burnout environments: everything from advanced manufacturing and cyber security to air traffic control and financial trading.

Two findings stood out. The first is that, although overload drains people, meaningful responsibility actually anchors them: nurses were less likely to leave when they held greater primary responsibility for patient care.

This was seen as a signal that they were trusted and relied upon. Aha! This is absolutely on the money. Stretching people doesn’t mean shovelling more work onto their plate; it means giving them more accountability, greater freedom of choice, increased autonomy, and stronger decision-making rights.

Accountability. Empowerment. Who would have actually thought that this was the key to reducing undesirable turnover?! It requires you to distinguish between simple overload and meaningful responsibility.

The research concluded that, when nurses are trusted with real responsibility, they feel more central to the work of the unit. Increased responsibility signals that the organisation sees them as capable and important, deepening their sense of ownership.

And in a setting like intensive care, where the work is demanding and consequential, that sense strengthens commitment. Nurses feel the demands of the job, but the job is also meaningful.

The second finding was that co-worker support is a critical factor. When nurses had support from their colleagues, it mitigated the negative impact of working for long hours under intense pressure.

The article is firm in its conclusion. Hospitals tend to approach retention as a staffing shortage or compensation issue, but relying on those levers is unlikely to change anything.

Leaders need to pay attention not only to how much work nurses do, but also to whether that work gives them a sense of ownership… and when the team is functioning well (that is, their colleagues step in when the pressure rises) the anchoring effect is powerful.

Accountability, empowerment, meaningful work, and high-performing teams will always trump burnout and dissatisfaction… in any industry.

THE DO’S AND DON’TS OF RETENTION

This is fine in the healthcare environment, but how can you apply it to your business?. There are some common steps that I think apply to any industry. Doing these things will lock in your highest performers, and motivate the people who probably shouldn’t be there to go somewhere else.

I’ve broken this down into a list of do’s and don’ts. There are four things you should stop, and four things you should start.

THE FOUR “DON’TS”

I’m going to lead out with the don’ts. Here are the four things you need to stop:

1. Stop treating everyone the same

I originally wrote this point as “stop doing dumb sh!t”. But I guess the dumbest thing you can do is treat everyone the same. Look for the easy wins here: spend more time with your best people; stop rewarding poor behaviour or performance as if it’s okay.

I always made it abundantly clear that I intended to discriminate between team members based purely on merit: performance, behaviour, and commitment to the job.

2. Stop throwing more work at an overworked team

If you do that, you absolutely will burn them out. My approach in the corporate world was almost counterintuitive: instead of constantly demanding that my team do more with less, I was constantly asking what I could clear off to improve their focus on the highest value initiatives.

Do the few things that give you the biggest bang for the buck, and nail them! Stop any work that doesn’t make an appreciable difference.

3. Stop making excuses for your worst performers

You may have a hundred reasons in your head why you can’t get rid of your worst performers… stop it! They need to go, and until they do, you will never make headway on your retention problem. Your best people will eventually leave.

I have never spoken to a leader who has regretted removing a poor performer. On the contrary, I’ve heard the same 6 words hundreds of times over: “I wish I’d done that sooner.”

4. Stop micromanging

People need to feel as though you trust them and that they have autonomy. If you’re constantly in their knitting, questioning how they’re doing their jobs and overriding their decisions, do you think they’re going to feel trusted and valued?

Until you get out of their way, they can’t stretch. Leave the vacuum and watch them grow into it. That requires discipline: you have to let go of the steering wheel and let them grab onto it

Until you learn to operate at your own leadership level, you’ll continue to stunt your people’s growth.

THE FOUR “DO’S”

Alright, now for the do’s. Here are the things you need to start doing. Of course, you may already be doing some of these, and if so, that’s excellent. Just treat them as confirmation you should continue doing them.

1. Start giving people more control over their day-to-day work

Empowerment and accountability are two sides of the same coin. Without empowerment, you’ll never get true single-point accountability.

This is where you have to start if you want to drive execution excellence. Once people have everything they need to perform, that’s when you can start to stretch them. That’s when their satisfaction, impact, and performance skyrocket… it’s also when they become more committed, diligent, and loyal to your business.

If you want the ultimate “how to” guide for empowering your people, have a listen to Ep.27: Unleashing the Power of Your People 

2. Start focusing on the most important outcomes

When you stop throwing more work at your overworked team, the flip side is that you need to focus only on the highest value outcomes. So, for a start, you have to work out what actually creates the most value

And then, you need to be ruthless about stopping everything else!

Just think about this for a minute. If you absolutely nailed your top six highest-value initiatives, do you think anyone would give a sh!t whether or not you got to number 43? These strong leadership choices give your people the opportunity to succeed.

3. Start developing individual capability

If you want to stretch an individual, you have to know where they are now. You have to assess what their latent capacity and potential is, and help them to bring that out.

Of course, you can’t do that unless you know them pretty well. This doesn’t happen over beers on a Friday afternoon: it happens in the leadership dialogue. All of those interactions, big and small, that help you to understand where that person is at.

Once you know, you can both take a bit of risk, in a relatively safe environment.

4. Start building a High Performing Team

In my experience, the research finding on co-worker involvement is only meaningful when that involvement is high quality. That means the team itself has to be a high-quality team.

Once you stop treating everyone the same and differentiate based on performance, you’ll be heading in the right direction. But if you think you already have a high-performing team, then I’d like you to challenge yourself.

Go back and have a listen to Ep.355: The New Rules for High Performing Teams, and see how your current team stacks up.

LEAD WELL, AND THE “RIGHT” TURNOVER WILL FOLLOW

Turnover is a function of how you lead your people. If your undesirable turnover is high, there’s a message in that… 

The recent article from Harvard Business Review confirms what No Bullsh!t Leaders already know: people are happier and more productive when they’re stretched… when they’re valued as a critical part of your enterprise rather than just another cog in the wheel.

If you work on the do’s and don’ts from this episode, you’ll start to see the green shoots of progress relatively quickly. If your undesirable turnover is high, then stop blaming the market… stop blaming HR… stop blaming your people. 

Look in the mirror; that’s the place where you’re most likely to find the answer.