Predicting resignation risk (and what to do with the data)
Employee turnover is known to cost tens of thousands of pounds: both directly and indirectly. There are simple ways for organisations to anticipate what might happen, and deal with cases before they’re forced to react to a notice letter.
A few years ago (in 2019 to be exact), IBM announced that the company had developed artificial intelligence that can predict at 95% accuracy if an employee is planning to resign within six months. Technology has already transformed people management, and as solutions develop by becoming better and more cost-effective, this trend will continue. If anyone has had good or bad experiences with resignation predicting AI, we’d love to hear about it in the comments!
Many companies are not willing or able to invest in technology that will point out potential leavers, but luckily, research that helps managers look for signs of someone planning an exit is in the public domain. This SMHR article outlines the 13 things to keep an eye on – and also the ones that traditionally have been seen as clues that someone is on the market.
For anyone too busy to read the whole article, here’s a list of the behaviours that research suggests to be strong indicators of potential resignation:
Their productivity has decreased.
They have been less of a team player than usual.
They have been doing the minimum amount of work.
They have been less interested in pleasing their manager.
They have been less willing to commit to long-term timelines.
They have exhibited a negative change in attitude.
They have exhibited less effort and work motivation.
They have exhibited less focus on job related matters.
They have expressed dissatisfaction with their current job.
They have expressed dissatisfaction with their supervisor.
They have left early from work more frequently than usual.
They have lost enthusiasm for the mission of the organisation.
They have shown less interest in working with customers.
We always recommend that clients train their managers to evaluate resignation risks and every 3-4 months evaluate how to proactively respond to individual cases – before it’s too late. An annual or six-monthly evaluation is too infrequent, as a typical time between an employee deciding that they want to change to handing in their resignation is six months.
Companies cannot (and shouldn’t) try to stop every resignation. Some turnover is healthy and sometimes there’s an irrecoverable mismatch between the company and the employee. In these cases the employee should be allowed to leave and wished all the best for their future.
A typical quarterly review should go like this: each manager reviews with their manager those at risk of leaving and what they’ve seen to support that conclusion. Then a decision is made about whether it’s appropriate to take action to retain the colleague (a regrettable resignation) or plan for a replacement (no regret). Even the regrettable resignations can’t always be stopped if someone has been offered a role that the current employer simply cannot match.
The regrettable resignations are obviously the ones with difficult-to-replace skills, sustained high performance, and potential to take on weightier roles in future.
The typical first response to a flight risk is to look at the individual’s compensation. We know that it is a useful starting point (looking at internal peers and available market data for similar roles) but often is not the long-term solution if other factors causing unhappiness are at play. After all, if someone feels that they are underappreciated in other ways - they can’t take time off, get along with their boss, or can’t see an attractive career path with the current organisation - offering more money will not increase their motivation to perform. It may buy some time, though.
Working for the right manager, having more interesting work, development opportunities, working environment etc. can often mean more if the money is at the right level. Not many people leave for less money, but it’s not entirely unheard of.
Individual cases require individual attention but often organisations deal with structural issues. Apart from the cost of regrettable resignations (replacement costs and productivity losses), structural problems that can cause resignations are the same ones that impact the organisation’s performance negatively.
While exit interviews are a must anywhere, they are valuable only if they’re continuously analysed. The limitation of exit interviews is that they often tell leadership what they already know: remuneration budgets may have been limited, learning reduced to cut costs, or not many people progressing because of limited positions.
The underlying reasons are more often found in three domains: 1. do people have sufficient autonomy in their roles to perform and experiment, 2. has the organisation expressed its purpose and mission in a way that it allows the employees to align with it, and 3. does the organisation support its employees to reach their full potential.
When we work with our clients, we help them anticipate the immediate needs, prioritise them, and design workable solutions. But we also support creation of a culture that eliminates the individual cases as much as possible – making high performance and retention go hand in hand.