Flight Risk: Managing Employee Turnover

To minimize the impact of employee flight risk, companies must assess key factors leading to turnover. Identifying these risks early allows businesses to implement strategies that enhance retention and reduce disruption.

By Brad Nakase, Attorney

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Table of Contents

1. What is employee flight risk and how do you handle it?

2. What could make a worker a flight risk?

3. What are the telltale symptoms of a flight risk for an employee?

4. The expense of worker flight risk for the company

5. How to evaluate the flight risk for employees

6. What steps can HR take to assist in reducing employee flight risk and retaining staff?

7. To sum up

What is employee flight risk and how do you handle it?

More than ever, employees that pose a flight risk to your company might cause damage to the business. Organizations have been dealing with issues related to employee turnover and talent acquisition more and more in recent years. A new Mckinsey analysis states that over four million Americans departed their jobs in June 2022, and 40% of respondents in 6 countries said they were dissatisfied with their positions and were thinking about doing so soon.

HR undoubtedly faces a new problem in trying to hold onto possible flight risk personnel while minimizing the disturbance and expenses that come with voluntary resignation. HR managers can use this article to learn more about worker turnover and how to identify possible flight hazards by conducting an employee flight risk assessment.

Within the field of human resources, “flight risk” is the likelihood that a worker may depart from your company in search of better prospects elsewhere, due to challenges at work, or for other personal motives that we shall delve into more.

Data from Ceridian’s 2022 Pulse of Talent poll indicates that 61% of workers worldwide are flight risks, with 38% actively seeking a new position and 23% being receptive to the right opportunity.

Any company that employs a large proportion of flight risk has serious risks, especially given the competitive labor market and high unemployment rate right now. By the end of May 2022, there were 11.3 million available jobs in the US alone, a significant increase from the 9.3 million positions that were available in Spring 2021.

The possibility of an employee flight risk could raise a number of issues for the company. Team disarray brought on by voluntary resignations may have a detrimental effect on output. Resignations, in addition to wasted time during the onboarding process, will incur hiring expenses, which will all impact the business’s profitability.

What could make a worker a flight risk?

There are multiple elements that interact to make an employee a flight risk:

Lack of professional development and advancement possibilities: The most common reason respondents left between Spring 2021 and Spring 2022, according to Mckinsey’s 2022 Great Attrition study, was a lack of opportunities for career growth and promotion.
Reevaluating the significance of work-life balance: Many people have given their employment and work lives less priority since the pandemic, according to a 2022 Wellness at Work Report. Workers desire jobs that enable them to achieve their goals of having an improved work-life balance and spending more time with their family at home.
Insufficient pay: The belief that a worker is being underpaid relative to the market is another major factor contributing to flight risk. Many workers think they can find a new position with benefits that are comparable to or better than those they currently have, and that pays them as much or more.
Leaders who lack empathy and inspiration can negatively impact worker engagement and team morale, leading to a decline in trust and respect for higher-ranking personnel. It’s quite challenging to win back that trust and respect after this.
Lack of significant work: Workers want to be part of a company that makes a positive impact on the world, so they want to work on projects that matter. Millennials, especially, are looking for more than simply a paycheck every month; they are more often looking for employment that excite and inspire them to come to work.
Insufficient flexibility at work: As a result of the pandemic, the majority of businesses have changed their ways and started letting workers work from home. Countless people, especially those who provide care (parents, pets, etc.), profited immensely from this flexibility. While many companies have gone back to their pre-pandemic working practices, a lot of workers are now searching for freelance, remote, or hybrid positions that will allow them to continue having flexibility in their work schedules.
Insufficient support for employees’ health and well-being: Everyone benefits from putting employees’ health and well-being first since we cannot function at our best when we are physically or mentally ill. But excessive workloads and lengthy hours cause stress, which eventually results in voluntary resignation or burnout.
Major life changes: Significant life events like getting married, getting pregnant, having a child, ending a relationship, losing a loved one, being sick, or even a pandemic might all make an employee more likely to be a flight risk. These kinds of life transitions frequently result in changes in values and priorities, which can affect how they approach their jobs, their professional lives, and employment overall.

What are the telltale symptoms of a flight risk for an employee?

When an employee becomes a flight risk, there are a few indicators to look out for:

Work habits that affect productivity: Keep an eye out for signs of declining productivity as well as discernible shifts in work behaviors, such as arriving late for meetings or tasks.

Loss of motivation: When working on a project or going about their daily business, an employee may exhibit lower levels of motivation than in the past.

Performing the bare minimum necessary: Your employee rarely goes above and beyond what they are instructed to do; instead, they merely perform the bare minimum to appease superiors.

Taking more time off than typical: Keep an eye out for any increases in absenteeism, including sick days and unpaid time off, as these could indicate a potential flight risk.

Undergoing significant changes in life: Think about how an employee’s impending or current major life change could impact their productivity or professional objectives.

Missing deadlines on a regular basis: A previously conscientious worker who has started missing deadlines on a regular basis may potentially be a flight risk worker. This might also point to other problems, such as poor time management or an excessive workload, though.

Lack of initiative to take on new tasks: One of the most effective ways for a worker to advance in their profession and show that they are prepared for a promotion is to take on fresh challenges. If workers have no interest in staying with the company, they might not be willing to get involved.

Uninterested in their professional growth: When someone is uninterested in their growth as an employee, there is a disconnect between their work and the company.

The expense of worker flight risk for the company

Flight risk comes with a number of consequences, both monetary and non-monetary.

About one-third of the employee’s yearly salary is lost with each departure. Lost knowledge, longer interview times, and decreased production account for 67% of those expenses. Meanwhile, hard costs—such as hiring, onboarding, and recruiting temporary employees—account for 33% of the expenses. Even worse, an inadequate hire brought on by a subpar hiring process or faulty managerial choices can cost a company between thirty and one hundred percent of an employee’s yearly compensation.

Furthermore, when an individual departs from an organization, the company loses information and abilities. The burden for the team can also go up while they look for a successor. This may lead to disarray and a decline in team spirit.

Relocating, retiring, or changing career objectives are some of the unavoidable events that cause employees to leave, but with the correct HR strategy, many grounds for flight risk may be reduced.

How to evaluate the flight risk for employees

The best approach to determine who might be at danger, how serious a threat this is to the company, and what to do is to conduct an employee flight risk assessment. This is the process to follow:

Step 1: Gather and compile the information

Gather information on all of your former workers to identify trends and recurring themes among the those who quit.

For instance, what role did the employee initially join the company in, and what role does the employee currently hold? How long does it take between promotions? What were the results of their peer reviews and performance reviews?

This data can be produced using a spreadsheet, an HR software system, or an employee flight risk tool.

Step 2: Analyze your information

Next, examine the gathered data to identify potential flight risks in the future. Make use of predictive data analytics, which makes use of historical data to forecast future behavior on an individual basis. HR departments can use predictive models to identify high achievers throughout the hiring process and to predict which staff members are most likely to leave.

Experian offers a case study of predictive analytics’ effectiveness. The company had to deal with three to four percent higher than desired turnover rates. Experian could thus identify employee flight risk by using a 200-item predictive model.

In a similar vein, IBM was facing significant rates of employee turnover in key positions. An algorithm comprising performance, promotion history, salary, and additional data was created by the analytics team.

If you believe that data analytics isn’t currently something your HR department or you can use to your advantage, think about gaining these crucial skills via a certificate program. This will help you and your group develop a comprehensive set of analytics skills and promote data-driven decision-making in HR.

Step 3: Identify who to concentrate on

After you’ve analyzed your data, utilize a flight risk matrix. This will assist in identifying the workers that need more attention. The matrix will split employees into four quadrants depending on their potential to leave and the impact their absence would have on the organization.

A worker who is unlikely to leave and whose turnover would not significantly damage the company would have a lesser impact. It would not be advisable to interview the employee in this situation.

On the other hand, a worker with a high probability of leaving and a large influence on turnover is likely to possess significant knowledge or special abilities that the company needs. This kind of employee’s departure would affect the company. Thus, you should concentrate your attention on these kinds of employees.

Step 4: Decide which steps to take

Choosing the best course of action is the last stage after identifying employees who pose a flight risk.

HR can create a leadership and growth plan for staff members that will benefit your company, do retention interviews, and give high-risk workers a job satisfaction assessment.

What steps can HR take to assist in reducing employee flight risk and retaining staff?

HR has a variety of options for lowering the risk of employee flight. These are listed below:

Incentive programs: Acknowledgment and rewards

Let’s say a bright worker is dissatisfied with their job and believes there is a chance to improve their pay elsewhere. If that’s the case, they might quit, especially if there’s nothing more alluring about your business to keep them there. Let’s be honest: most employers might not be able to provide a pay raise. HR is still able to create employee-attractive incentive programs.

Publicly praising, honoring, and celebrating your staff members’ accomplishments and hard work will increase engagement. Additionally, it can support the traits and conduct you value in all of your workers.

To further guarantee that you keep their skills, give them the chance to transfer to divisions within the company that better suit them. It also gives them more chances to advance in their careers.

Acknowledging each worker’s individuality and praising their efforts demonstrates your appreciation for them and lets them help to mold their position and make a good impact.

Give staff development top priority

A primary cause of flight risk is a shortage of career advancement opportunities within the company. Making sure that employee development is a top priority for your business is the greatest method to combat this. Create individualized growth plans for each employee by collaborating with supervisors.

Research from Gallup has demonstrated that investing in employee training and development may boost sales, enhance customer happiness, and double a company’s profitability.

Plan regular reporting and check-ins.

Make sure managers plan frequent one-on-one meetings with every member of their team and draft individual reports every quarter or every two years. Employees will be aware of their position and what needs to be done in order to advance within the organization and achieve their career objectives.

Talk about pay equity both within and outside.

It’s critical to monitor your rivals, particularly given how unstable and unpredictable the post-pandemic labor market is. Keep an eye on the perks they’re providing to staff members and make sure you stay competitive. Think about how you can differentiate yourself with your benefits and pay packages.

But exercise caution—don’t just mindlessly follow a trend in pay and perks. Instead, assess the internal demands and culture of your business and match your needs for benefits and remuneration with them. For instance, workers at big businesses like Microsoft and Facebook were offered a wage reduction if they choose to work remotely. However, Airbnb declared that its pay for remote workers will not change and will still be divided into distinct levels according to nationality. As a result, workers on lower location-based pay tiers saw a rise in pay.

While tackling legal pay parity is crucial, your company may stand out from the competition by addressing the murky area of global pay disparities.

Promote wellness and health initiatives

If your staff don’t put their health and wellbeing first, they won’t be able to work at their best. Thus, it is imperative for all companies to give health first priority.

Intuit, a software corporation, offers reimbursement for meditation lessons as part of their “Fit for Life” program, which also offers incentives for walking during business hours. Some businesses offer yoga sessions and nap pods to their staff as a way to help them unwind.

Implement flexible work schedules

Allow workers to work from home, provide flexible scheduling, or adopt a hybrid style of working. Allowing employees to work from home fosters a sense of independence and trust that many find valuable.

Hiring remote workers also gives you the freedom to select the most qualified candidates for the position because you aren’t restricted to conducting interviews and hiring inside a set area.

Cultivate managerial leadership abilities

Lastly, assist managers in defining their plans for leadership development. Improved leadership abilities enable managers to encourage, inspire, and lead their teams more successfully.

Help managers develop their interpersonal skills and leadership strategies so they may become effective leaders.

To sum up

Every business is concerned about the potential of employee flight. But, if you know the reasons behind turnover, you can take thoughtful action to reduce it and guarantee that your staff members are content and thriving at work.

Have a quick question? We answered nearly 2000 FAQs.

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