Quit and Win: How to Reduce Staff Turnover

Quit and Win!
How to Reduce Staff Turnover
By Steven Finkel

He had many years of experience as the successful owner/manager of a fine firm, yet he had a problem. "It’s not that I hire the wrong people," he said to me. "It’s that I keep the wrong people too long."

To coin a phrase, "he ain’t the only one!" Were a long-tenured owner/manager to add up his cumulative costs over the length of his time in business, putting aside only commissions paid to consultants, it is probable that his highest expenditure would be not rent, not phone, not furniture. Rather, it would be the lost draws, social security, unemployment payments, phone, and business costs associated with ultimately unsuccessful consultants.

Moreover, in addition to tangible costs, that owner would have such items as time, emotional drain on both manager and office, lost deals (not always known), negative client reactions to a poor consultant, the fact that another person on the same desk could have been doing much better, candidates not recruited who might have been placed by someone else in the office. . . The expense of an unsuccessful consultant is truly staggering.

Despite the recent spate of tests, services, and consultants purporting to improve your odds in the selection of new employees, the facts are that no one really has the total answer. During the late ‘60’s and early ‘70’s, heavy testing was in vogue amongst many major corporations. Huge amounts were spent in an attempt to arrive at a formula or test which predicted success. Consistently poor or mediocre results have cause most of these firms to drop the testing programs. They have been weighed – extensively – and found wanting. Thirty-five years ago, Charles B. Roth, one of America’s finest sales trainers and business authors, wrote, "The weakness of aptitude test lies in the fact that they can’t tell much about intention; the important thing is a man’s willingness to throw himself whole-heartedly into the job." This statement remains as true today as the day it was written.

What, then, is the answer? Given the assumption that the selection process and the initial training must both be as excellent as possible, what else can be done to prevent "keeping the wrong people too long?"

I believe that rigid adherence to a system of progressive and quantifiable steps of elimination will help any organization. The earlier an individual who lacks the necessary ingredients for success can be identified and eliminated, the more we can concentrate our time and money on those who deserve it – and the greater our profits.

Following are some ideas to consider to accomplish just that:

Pre-Hiring

A well-respected individual with a major franchise organization recommends having the potential consultant make 25 to 50 calls (for example: Marketing calls) to a pre-determined list of prospects before hiring. This individual says he is not concerned with the results; he is concerned with how rapidly the potential consultant hits the phone and the amount of time spent between calls. Too much reluctance eliminates the candidate from contention. While I have never personally utilized this method, it seems well worth considering as an early eliminator.
Have the prospective consultant read a substantive book on this industry (e.g. Breakthrough!) before coming to work, or before extending an offer. While a new person will obviously not benefit to the same degree as an experienced consultant, such a book should generate extensive informed questions from the prospective hire, as well as a genuine knowledge of the real workings of our business. Moreover, if it is evident that the book has not been read, the candidate should be immediately discarded.

First Two Weeks

In the early stages of training, a series of daily written tests will help identify those who will be ultimately unsuccessful in our business at a very early stage, despite a rigorous selection process. This method has allowed those firms utilizing it to eliminate 25 to 35% of those hired in the first week. Barring major personal traumas, poor scores always indicate either a lack of intelligence or a lack of commitment (they didn’t study). Either eliminates a prospective consultant from eventual success and from further employment.
A written structured evaluation should be conducted at two weeks. While it is not possible to predict with certainty a "winner" at this time, it is frequently possible to predict a "loser". Habit patterns such as arriving late and leaving early, not studying training material, poor voice or speech patterns, inattentiveness during sales meetings or formal training, and many other problems are unlikely to change. A sample two-week evaluation form will be published on this website.

First Month

Every firm should have a good daily planner, (planners are available through our firm). Especially in a new consultant, a consistent reluctance to fill out the daily planner indicates an unwillingness to take direction, to follow the system, and to pay the price necessary for success in our industry. Termination of the new employee is indicated.
The new employee must keep track of his numbers. The manager should have minimum acceptable numbers each week which have been written out before the new employee comes on board. If the minimum number of calls are consistently not achieved, the employee lacks commitment. Early termination is the answer.
Correct Role-Playing should be a mandatory and on-going part of every training program (see "From Knowing to Doing: How to Implement" on this website for complete information). If the new consultant does not do well in role-playing, he cannot do well "for real". Consistently poor performance in role-playing with no sign of improvement is a clear indication of qualities which do not indicate future success.

First Quarter

Minimum acceptable billings should also be determined and written out before the new employee comes on board. This will obviously vary depending on the firm, as a clerical desk will produce billings more rapidly that a technical desk, for example. The manager must determine what is acceptable for his firm, must write out his minimum anticipated results, and must rigorously eliminate those who fail to achieve these results.
Formal reviews of the fledgling consultant must be done at 30, 60, and 90 days. The consultant must be told his strengths, his weaknesses, and what is expected of him in terms of hard numbers during the next 30-day period. These expectations must be written out by the manager and put in the consultant’s file (copy to the consultant optional). This step will stop the old "he hasn’t produced any billings, but he’s got a lot going on" feeling at 90, 120, and even 150 days, as the investment in an unprofitable consultant spirals. Consistent failure to achieve pre-determined quantifiable minimum objectives necessitates termination . . .and the earlier, the better.

These suggestions, with the emphasis upon early elimination, may appear to be harsh to some. They are not. The pre-determined minimum objectives must be realistic, attainable, and based on knowledge of what has been achieved by others. To do otherwise is counter-productive. Given the fairness of the goals, however, the owner-manager must base his decisions as to the continued employment of new consultants upon quantifiable results at early stages of development.

Any improvement in the selection of consultants and in our initial training program will obviously benefit us; however, only by rigid adherence to a planned program of early termination predicated upon realistic minimum numbers can we truly develop our firms----and our profit margins----to the maximum!

Authored by Steve Finkel http://www.stevefinkel.com