Proactive Coaching: The Solution to High Employee Turnover and Boosting ROI

The US currently has the lowest unemployment rate in the last 50 years and while that's great for the overall economy, it isn't an ideal time to be an HR manager. Not only is it tough to acquire talent but the recruitment costs have also gone up substantially. But that isn't even the worst part- what if your employees keep leaving and you have to be constantly on the hunt for talent? It's frustrating and expensive.

As per a study by SHRM, the cost of employee turnover ranges between 6 to 9 months of their annual salary. So if you are hiring an employee with a salary of $50,000, each turnover would end up costing the firm between $25,000 to $37,500. That's a serious leakage of resources that employers can't fix except by retaining their employees.  

If you ask around, the reasons for employees leaving a job vary significantly depending on their perspective:

  • As per employers, most turnovers are caused by poor performance and the firm letting them go.
  • As per employees, most turnovers are caused by the lack of appreciation for their performance.

As evident, there is a fundamental mismatch between how each of them perceives performance.

Enter Proactive Coaching

Not everyone is great at their job. Some are rockstars, others mediocre and then there are still others who fall through the cracks. It is the last category that causes most turnovers and by extension has the highest potential. Instead of firing a poor performer, it makes much more sense to invest a bit more in their coaching to achieve exponential results. In fact, it's better to actively coach them before they perform badly.

As the name suggests, proactive coaching is an employee training program that you can undertake before employees go off track.  After all, it's better to coach faltering employees than to wait for them to mess up a few quarters. Is it even possible to recognize a poor performer before they perform badly? Turns out, it is! Read more about it here. The benefits of Proactive coaching are obvious: 

That being said, it's not that all poor performing employees can benefit from proactive coaching. Some employees are simply disengaged or lack relevant skills for the job and thus it is better to let them go rather than investing additional time and resources in them. After all, a bad hire can cost as much, if not more than the cost of turnover.

The Dilemma

The biggest challenge for HR managers is walking the fine line between the cost of a bad hire and that of high turnover. They can't keep underperforming employees just to save turnover costs but they also can't let go of all underperformers because some of them may significantly improve after coaching. So at some point, they must decide who to fire and who to coach. Sadly, the current employee review processes are simply incapable of answering such intricate questions and for that reason, they need a better solution.

This is one of the five areas that Prodoscore can help managers. Prodoscore is a productivity tracking solution that departs from the traditional fixation on end result performance measurement and takes a holistic view of productivity. For example, If two employees closed 0 deals in a week, a common review would suggest they are on the same level keeping managers in the dark about their true competencies. Prodoscore can present a much more informative assessment and highlight which one of them is better engaged by tracking emails sent, phone calls made, CRM activity, the amount of time spent on those efforts, and most importantly, give managers better insights on who needs Proactive coaching and who needs to be let go.

To wrap things up, Proactive coaching can be an effective strategy to bring down the turnover rates and save significant costs in the process. The only challenge lies in figuring out who needs coaching. For that, get in touch and we can start talking.