COVID-19 changed employees' needs and concerns at work, which prompted many companies to change their approaches to employee satisfaction and retention to keep workers from leaving. In this episode of All Things Work, host Tony Lee speaks with leading employee retention expert Dick Finnegan on what companies can do to engage and retain employees, especially working moms, in this new era of work.
COVID-19 changed employees' needs and concerns at work, which prompted many companies to change their approaches to employee satisfaction and retention to keep workers from leaving. In this episode of All Things Work, host Tony Lee speaks with leading employee retention expert Dick Finnegan on what companies can do to engage and retain employees, especially working moms, in this new era of work.
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Tony Lee:
Welcome to the All Things Work podcast from the Society for Human Resource Management. I'm your host, Tony Lee, head of content here at SHRM. Thank you for joining us. All Things Work is an audio adventure where we talk with thought leaders and case makers to bring you an insider's perspective on all things work.
How do I keep my employees from walking out the door? It's a question faced by every organization every single day and not knowing the answer has real consequences. When employees leave, there are real costs. Remaining employees have more work to do, new applicants need to be sourced and interviewed and hired and onboarded and trained. Oh, my gosh. The bottom line is that it's almost always cheaper and more efficient to retain and motivate existing employees than continually hire new ones.
Now, providing employees with a quality work experience that makes them want to stick around rests first in understanding their needs and their concerns at work, and you find that out by asking them, which often means employee engagement, surveys, and other types of research.
Now, the pandemic has shifted employees concerns to such topics as virus prevention and mental health and burnout and the blurring between work and personal life. So in today's episode, we'll be talking about what companies can do to engage and retain their employees in this new era of work. And there's no better person to discuss this topic than our guest today, Dick Finnegan. Dick is the CEO of C-Suite Analytics, a consultancy specializing in employee engagement and retention solutions. He's widely recognized as the leading thinker on retention and the author of the bestselling book, the Power of Stay: Interviews for Engagement and Retention, which is published by SHRM. In his experience, it reads like a screenplay to a Hollywood thriller. Dick has solved turnover and engagement issues at Siberian banks, African gold mines, multi-national Chinese corporations, and, of course, the CIA.
So Dick, thank you so much for joining us for this issue of All Things Work.
Dick Finnegan:
Tony, thrilled to be here. I love the way you read it like a thriller.
Tony Lee:
There you go. Well, you always thought about your life as being James Bond-ish, right?
Dick Finnegan:
Yeah, sure.
Tony Lee:
Sure. Why not? Why not? All right. So let's dive right in. So there's a report from Gallup that you're familiar with that says that employee engagement during the pandemic and in the first few months of the pandemic reached an all-time high. So there's some question. Did it reach an all-time high because company leaders greatly improved their communication with employees, or did it reach that high because companies laid off everybody who was disengaged. What's your thought there?
Dick Finnegan:
Great question. Tony, in my company, we track two pieces of data all the time. We track Gallup's engagement data, and we track the Bureau of Labor statistics quits data, how many people quit, so we're on that data all the time.
And what was so interesting about the Gallup data is that, first of all, I want to give you some perspective. Gallup's been tracking employee engagement for 21 years. They started in the year 2000. And through this period of time, the lowest they do engaged, not engaged, and actively disengaged. They're nicknames are not engaged, or people sleepwalking through their jobs, actively disengaged, or people sabotaging others. So all the counts is the engaged, and that percent has never been lower than 27, has never been higher than 34. So it's about one third are engaged. Nothing much changes it over 21 years, which we could talk about later, if you like, as to why.
But what happened in June was it hit its all-time high, which was 38%. In July, it went way down again. And according to Gallup, it went up in part because so many people had been laid off, and many of the people laid off were people with bad attitudes and people who were not engaged.
And there were some other factors. Work became bigger to people because it was in your dining room all the time. People were actually working three... This is a long period of time, three hours longer when they were working from home than they had been previously. Three hours longer. So there were a lot of people more engaged, but there was also this subtraction of the people who are not engaged, which caused that percent to go up.
But in July, it came significantly down, and you wouldn't guess what Gallup said was the biggest driver. The biggest driver was the George Floyd killing, that people got so distracted by it, plus so demotivated by it, it took the steam out of work.
Tony Lee:
Wow. That's not at all what I had expected.
Dick Finnegan:
Right.
Tony Lee:
So what's been the reaction since, now that we're many months past that? Do you think it's back in that same range of where it always is?
Dick Finnegan:
I think it's back in the 34%, 33, 34%. There's a gradual climb over the course of 21 years, but you can see it's very gradual.
No matter what, it's so interesting. Companies do employee engagement surveys, they get the results, and they do a whole bunch of things. And next year, most companies say, "Well, we didn't change much." And the Gallup data reflects the same thing, that we just don't change much.
There is a remarkable study by Deloitte that says US companies spend, get ready for this, $1.53 billion a year on employee engagement, and what we get back for the $1.53 billion is not much because we can't move the needle.
Tony Lee:
Yeah. Unbelievable. And it's funny, a lot of HR professionals spend an awful lot of time, obviously, on this topic, and they're measuring their retention rate. They're measuring everything they possibly can. But can you really measure engagement and motivation? Do you have faith in the engagement surveys to actually be accurate representations of what's going on with the workforce?
Dick Finnegan:
Well, it's not a bad measure. There's a phrase that we say here, which is what do employees talk about over dinner. And it was actually quoted about two weeks ago, and Forbes quoted me on this phrase, what do people talk about over dinner, because that's a better indicator than anything, right? Because people come home, no matter what shift they work, whether they go home or they go to the gym, they go to a bar, they're talking to somebody or they're talking to themselves. When all the guards are down, they're not emotionally intelligent because they're tired. And they're just saying, "How was your day, dear?" And so if we knew what people talked about over dinner.
And there's a joke line here, Tony, which is when somebody says, "How was your day, dear," nobody says, "My day was okay. I just wish we had pet insurance." Because what people talk about over dinner is bosses, colleagues, and duties. That's all they talk about. Do I like my boss or my boss a jerk? Do I like my colleagues or are they jerks? Do I like what I do? Are customers good, bad. They talk about bosses, colleagues, and duties. And if you can't win in that box, you can't win with employees.
So employee engagement surveys will say one to five scale, how do you like your pay? One to five scale, how do you like your communication? One to five scale, how do you like your recognition? So you get all that data, but that's not necessarily what employees talk about over dinner.
So there's some value to engagement surveys. I'm going to tell you the best value, and I'm going to tell you the worst value.
Tony Lee:
Okay.
Dick Finnegan:
The best value is get it for the lowest level of supervisors because... I'll talk about, I'm sure before we're done here, the power of supervisors. Get it for the lowest level. It's what I call a limbo game. It's how low can you go on your surveys? Get it at the lowest level.
The worst thing about surveys is you get benchmark data, and you compare yourselves to other companies, and many companies do surveys really in part to get that benchmark data. But whereas, benchmark data is usually a really good thing for operations metrics, it's a really bad thing for engagement and retention.
And the reason it's bad is twofold. One is because most companies don't know what they're doing, so you end up comparing yourselves to companies that are not effective.
But secondly, and here's the big one. So I'm going to make up numbers here. If your engagement score is 61 and the benchmark is 60, then your CEO is high fiving you. Or if your turnover is 30 and the benchmark is 31, your CEO is high fiving you. But the difference is if HR says our turnover's 31, 30%, the benchmark is 31. That's good.
If HR says our turnover's 30%, it costs $6.4 million, nobody cares about the benchmark. And that's where we need to be. We need to be thinking about engagement or retention in terms of dollars and impact on productivity instead of are we as good or better or worse than somebody else.
Tony Lee:
Yeah. No, that makes perfect sense. Okay. So let's roll up our sleeves a little bit. We've got folks listening, anxiously awaiting advice on what to do next. So is the solution annual employee surveys? Is it pulse surveys every month, every two months? Is it focus groups? Is it stay interviews? Where do they go from here?
Dick Finnegan:
Yep. The answer is stay interviews. And let me give you some background.
Tony Lee:
Okay.
Dick Finnegan:
So Tony, I am a therapist by training, and I got into HR by accident like everybody else does, or almost everybody else. And so I was called in by the CEO one day, who said, "Turnovers high, go fix it." We had an argument. You and I have talked about this before. We had an argument, not a discussion, an argument. It was a bank. I said, "Look, we've hundreds of branches. Most of them have low turnover. A few have high turnover. Everybody in these branches of the bank sit in the same chairs, have the same customers, sit in the same buildings, have the same schedules, have the same pay, have the same benefits. The only variable is the boss. That's the only variable.
And so ultimately, we set goals for turnover for branch managers. They didn't like it. They told us we need pet insurance. Who knows what [inaudible 00:10:51] the reasons. And we set goals and turnover fell 19% in four months. We saved over $4 million.
And I eventually left, and I did all kinds of things. You said some things I've done. The first time I got asked to write a book by a publisher, I was both flattered and intimidated. And I found a professor of Industrial Psychology to coach me. Happens to be the best school for Industrial Psychology. The best PhD program in the world is at Penn State. I went to Penn State, have several degrees. Not that degree. Found a professor one night online who was interested in turnover, and Murphy and I made a deal that I would earn a fake PhD in turnover, no sheep skin, no tuition, but for months like at 10:00 at night, he'd send me an email saying, "Start looking at these studies. Here's somebody's dissertation. Study this. Study that."
So what I did was I studied the academic studies about employee retention and engagement that were academicians were hired by big corporations to really solve this. Not an article about best practices, but controlled studies on what works. And all of our work is based on science and all of our work cuts turnover 30% and more and improves engagement as much.
And there's one sentence that matters more than anything else. And the one sentence is, the number one reason why people stay or leave or engage or disengage is how much they trust their boss. That's it. There's other things. Depending on what surveys you read, there's a difference for the second reason, third reason, fourth reason. But consistently across the board, the number one reason people stay or leave or engage or disengage is how much they trust their boss.
Now tying it back to your question. So what companies do is they do engagement surveys, they do exit surveys, they get task forces, they have a retention task force, they have an engagement committee, and they create programs.
And so if recognition gets a low score, then it's, what do we do? Well, of course, what we do is we've employee of the month, employee of the year, employee engagement week. We give a backpack at five years, we give a clock at 10.
If communication is the low score, well, we're going to have CEO videos, town home meetings, pump up the company internet.
If career development is low, well, that's a harder one. We'll have career day. Every department gets a table in the cafeteria or bring in a brown bag lunch and serious speaker for the community college on careers.
Then you survey again a year later and nothing changes. Nothing changes because none of those things are about building trust with the boss, none of them.
So all of these one-size-fits-all programs that we are constantly reinforced to do are better to do than not just have tremendously low expectations, they're going to cause somebody to stay or leave. When's the last time you heard a good worker say, "My boss treats me like dirt, but I'm holding on for employee appreciation week."
Tony Lee:
Okay. So I get it completely, but it really sounds like the best effort is spent training supervisors, training bosses to be better bosses. Is that really what it comes down to?
Dick Finnegan:
No. And I'll tell you why.
Tony Lee:
Okay.
Dick Finnegan:
Because most supervisory training fails, and it fails, and I'm going to use an example, Tony, of situational leadership, a very common course the companies teach. So situational leadership will teach you there are four kinds of circumstances to respond to, and there are four categories of the people you're working with, so you can choose from a box of four on the left and four on the bottom and you pick the square and this is the way you should do it. So you leave this class and you give it high scores, and it is academically cool. But three weeks later, when you're in a circumstance, you probably don't remember which box you should be using. And that's why there's so much research that says supervisory training really doesn't create a lot of results.
Whereas, to get back to your original question, the whole idea about... I invented the stay interview idea. I invented it because we just presumed that leaders have a method to proactively build trust with their teams. So if we said, "We're going to have a trust course. We teach don't lie, don't break confidences." We give them all the things to not do, but there's not been a proactive thing to do that builds trust.
So stay interviews are the coolest of all things because when you meet with an... Let's say you meet with a new hire and you ask five questions. It's carefully researched what the five questions are. You ask five questions, you take notes, you probe, you learn more. You listen, you solve problems. Now you've got it. Now you've built trust because the trust word is what it's all about.
Tony Lee:
So stay interviews. Maybe you could just give a quick overview of how to conduct a stay interview.
Dick Finnegan:
Yep, sure, sure. So our clients have... I'm going to put in context of retention, have two retention goals. One for all turnover, one for new hire turnover. And the new hire turnover period is based on historical turnover. So many of our client companies have a 60-day new hire retention goal. We're working with some now that have 30-day new hire retention goals. And so we would train that supervisor would have the two retention goals. We would know turnovers' costs. We would now make turnover a business issue instead of an HR issue.
And they would do a stay interview. Let's say in the second week and the sixth week to make sure they make the 60-day retention goal. And they would sit with the employee. They would be trained to listen, to probe, and to take notes. We always say, "You're going to walk out of here being a listening, probing, note-taking machine. Don't even think about how to solve stuff. Just listen, probe, and take notes." And by doing that, and you're going to say, "Tell me more. Give me an example."
There are five questions. I could rattle off the five questions if that's helpful, but they're very available online and in my books. But there's five questions to ask. These five questions will get you to the promised land as long as you have the skills of listening, note taking, and probing.
Tony Lee:
All right, well that sounds like a winning strategy. Now I hate to say it, we're almost out of time already. This just flew by. But there's one other topic I really want to ask your opinion on, which is companies are having a particular issue in the last year with engaging and retaining working mothers. The pandemic has such a dramatic impact. Any suggestions there, other than the fact that once everyone's vaccinated, hopefully schools will reopen, working mothers will come back to the workplace. Although it sounds like there're an awful lot of working mothers who said, "You know what? I like not working." So what's your thought there?
Dick Finnegan:
The working moms have really born the brunt of this because they have chosen... Whether they're a single mom or a partnered mom, it's the moms who've stayed home for their kids, so they've lost momentum. They might have been in a great job or a job that they really customized for themselves. They might be able to get back to that job. They might start over. They've really born the brunt of this.
And the best advice I have for companies is if you're doing stay interviews, get ahead of this. Because you typically would say, "Well, we can't really help a mom manage her kid," but you can, depending on the flexibility of your policies.
So get ahead of it. Don't be surprised when a mom comes in and says, "I just got to go." "Well, but wait, can we talk about it?" "No, it's too late. I got to go." So get ahead of it. Like everything else on turnover, get ahead of the issues so maybe you can fix them.
Tony Lee:
Wow. That's that's great advice. Well, unfortunately, that's going to do it for today's episode of All Things Work. A big thank you to Dick Finnegan for joining me to discuss employee retention during the pandemic, stay interviews, and just a lot of great advice that you can find out more on. Go to shrm.org and do some searching. You'll find Dick's book, and you'll find lots of other great advice from Dick.
Before we get out of here, I want to encourage everyone to follow and subscribe to this podcast wherever you listen to podcasts. And while you're at it, be sure to give us a five-star rating and leave your review. Also, be sure to check out SHRM on Facebook, Twitter, and LinkedIn. And finally, you can find all our episodes on our website at shrm.org/atwpodcast. Thank you so much for listening, and we'll catch you next time on All Things Work.