Two stories of company turnover have hit my radar in the past month (I’m a little behind on actually posting!) and they highlight the importance of Culture and Reinventing Work.
Tale #1: Trail King’s 99.6% Turnover
The first tale of company culture is from Trail King. Trail King sells trailers. According to their website, they have “the best sales, the best trailers, and the best service.” Trail King made news last week when their CEO announced that they had lost 279 of the 280 workers they hired last year because of “work ethic issues”. He described a company where employees are paid well (starting at $13.50 / hour – nothing to scoff at!) and that they offer an Attendance Bonus, which encourages employees to use their vacation time to cover sick days in order to receive it (really – this is thought to be a bonus?!?).
CEO Bruce Yakley explained that most of the workers were members of the millennial generation and that they’re entitled attitude led to them simply not showing up for work. According to him, his turnover rate of 99.6% has nothing to do with the culture and how employees are treated. In a follow up article where he was challenged about the treatment of workers, he disagreed, stating:
They don’t see life the way we see life. At the end of the day, I have to run a manufacturing company. I need people to show up to work, and a lot of our people just quit coming. I think it has to do with work ethic. That’s what I think.
Tale #2: Zappos’ 14% Turnover
Now consider the second tale of company culture from Zappos. About 18 months ago, Zappos implemented a Holacratic system of work. In a Holacracy, decision authority is distributed throughout the organization, people self-organize and collaborate in “circles” depending on what they are working on, with circles changing as projects begin and end and priorities change. This is a huge change for anyone who has worked anywhere before. Imagine suddenly not having a manager. Or being a manager with your authority stripped from you. Change is difficult, and it’s been a bit of a bumpy road, even for Zappos, which has often been touted as having one of the world’s best company cultures.
Fast-forward to this year, when a couple of weeks ago, CEO Tony Hsieh sent a memo to all employees telling them to either get on board with Holacracy or to leave. He offered a severance of three months minimum to those who left. In Tony’s words:
As previously stated, self-management and self-organization is not for everyone, and not everyone will necessarily want to move forward in the direction of the Best Customers Strategy and the strategy statements that were recently rolled out.
Fourteen percent of employees chose to leave.
What does this mean to you and your organization?
- Look beyond traditional benefits for your employees.
- When turnover is an issue, look at your organization and your leadership first.
- Some turnover is good – but if it’s 99.6%, you either need to revolutionize your hiring practices or your culture.
- Your culture is not right for everyone – and that’s okay.
- It’s time to Reinvent Work. Purpose and autonomy are essential if you want to engage the next generation of worker. (Ask me about ROWE – Results-Only Work Environment for your organization)
Dan Pink’s Drive is one of my favourite leadership books. Check out this short animated video of the key points.