Beware of turnover contagion

The UK is now in a recession, and many other countries are not far behind. For instance, the US is on the brink of recession, while the European Union is facing surging inflation and a worsening economic slowdown.

Despite these challenging financial circumstances, the ‘Great Resignation’ is showing no signs of slowing down, particularly in the US.

As a result, employers need to continue to focus on their retention strategies. This is not just because attrition is very expensive – with voluntary turnover being calculated by Deloitte as costing about $110,000 per employees – but also because when an employee leaves it can be contagious and push other people in their team to also seek out new opportunities at other employers.

It is important to remember that humans are social animals, so losing a member of their team not only affects their workload (and stress levels), but can also impact the social side of their experience at work.

This phenomenon is known as turnover contagion, and it has been identified by research into tens of millions employee records from 86 organizations by data and analytics giant Visier.

The data showed that when an employee leaves, others in their team are 9.1% more likely to leave. The problem is particularly acute for smaller teams.

Visier’s research further showed that turnover contagion was most likely to impact teams with further resignations within the first 45 and 70 days.

Stopping turnover contagion in its tracks

Visier’s principal of research and value Andrea Derler tells UNLEASH: “As soon as a colleague resigns at work, turnover can be contagious in the sense that humans have a tendency to imitate other people.

“And unfortunately, we still find ourselves in a position whereby many businesses underestimate the impact that one employee’s resignation can have on the morale and retention of fellow team members.

“With a global recession looming, and recruitment costs surge, business leaders will be forced to sit up and recognize the impact of turnover contagion or risk feeling the implications for the long run.

“Implications include hindering growth goals and ambitions, driving wages up and disrupting the workplace for those who remain.”

While it is clear that employer must take action in response to turnover contagion, where should they be focusing their efforts?

“To future-proof the business and get ahead of this trend, HR professionals, business leaders, and line managers will need to plan risk assessment and mitigation strategies for talent retention in a more targeted manner,” notes Derler.

“We recommend taking a data-based approach and we encourage employees to properly evaluate their own work situation.

“Effective workforce planning and analysis is a business’s key to forecasting when an employee is likely to leave, factoring in turnover contagion as an added risk factor.”

To do this, employers need to get hot on specific teams with high turnover and watching out for employees’ pre-quitting behavior, such as decreased productivity, or logging off early more frequently.

This way businesses can pre-empt the resignation by taking direct action with those employees’ like having career conversations and exploring internal mobility opportunities.

Linked to this, “broadening employee peer groups should be a priority to help root them beyond immediate teams, mitigating the risk of falling prey to turnover contagion”.

All of these actions must be targeted within the first five months after the first resignation to have the most impact.

Derler concludes: “While predictive analytics cannot completely eliminate undesirable turnover, it is one critical tool in the toolbox of business and HR leaders that can help assess and track progress in mitigating unnecessary resignations.”

Are you ready to take action and avoid a sky-high attrition rate?

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