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Turnover Contagion


Did you know quitting a company is contagious? Yeah, us either. Luckily, there are really smart people looking at data and making such conclusions. That’s why we invited Andrea Derler, Ph.D., principal, research and value at Visier, a human-resources analytics company, to the show. Visier found that when employees were laid off or terminated, the likelihood that their direct colleagues would quit was 7.7 percent higher thn if those employees had remained. Ooooh, that’s juicy. Sounds like a podcast topic … so let’s do this.


TRANSCRIPTION SPONSORED BY:


Intro: Hide your kids. Lock the doors. You're listening to HR's most dangerous podcast. Chad Sowash and Joel Cheesman are here to punch the recruiting industry, right where it hurts. Complete with breaking news, brash opinion and loads of snark, buckle up boys and girls, it's time for The Chad & Chees Podcast.


Joel: Oh, yeah. What's up everybody? It's your favorite guilty pleasure, AKA, The Chad & Chees Podcast. I'm your co-host, Joel Cheesman. Joined as always, the Garth to my Wayne, Chad Sowash. And we are happy to welcome Andrea Derler, PhD.


[applause]


Joel: She's the Principal Research and Value Principal at Visier. Andrea, welcome to the Chad & Chees Podcast.


Andrea Derler: Hello. I'm so happy to be here.


Joel: Your mic is better than ours. I'm a little upset about that.


Chad: Yeah.


Joel: A little...


Chad: No, that's a good looking mic. Yeah, you can't see the mic, but it's pretty sexy. That's a sexy looking mic right there.


Andrea Derler: Thank you.


Joel: So, Andrea, a lot of our listeners don't know who you are. Give us a little Twitter bio and then we'll dig into the company and what you guys do and the data that we're gonna dig into today.


Andrea Derler: I started the humans behind the data. The accent that you all discover is because I'm from Austria, living in the US. I'm from the same city...


Chad: No, that's not a Raleigh accent. That sound like Raleigh, North Carolina to me. [laughter]


Andrea Derler: I can't even do that.


Joel: It's Southern Austrian.


Andrea Derler: Southern Austrian.


Joel: It's Kentucky Fried Austrian, is what that is.


Chad: Yeah?


Andrea Derler: That's right. I'm from a beautiful city of Graz, which is the same city as Arnold Schwarzenegger. Don't share his popularity quite yet, but I'm hoping to very soon with the type of research that we do. [laughter]


Chad: Andrea, the Terminator.


Joel: Yeah.


Andrea Derler: Data Terminator. Yes.


Chad: Oh, there it is.


Andrea Derler: Yeah.


Joel: Ooh, we found a new LinkedIn title for you, data terminator.


Chad: So a little bit more about you. How did you find your way to the US?


Andrea Derler: I won the Green Card Lottery, and that's no joke because not many Austrians actually wanna move to the US, so it's very easy to win the Green Card Lottery. [laughter] It is really true. And so, yeah, that happened about 16 years ago and that's how we got here. And this country has treated us really well, my husband and I, and my two kids.


Chad: Nice.


Andrea Derler: So we've been happy ever since.


Chad: Very nice. Yeah. Why leave Austria? Well, there's a good reason.


Joel: Well, there's pretty good skiing in North Carolina from what I understand, so.


Andrea Derler: That's probably up for debates. Skiing in Austria is awesome. That's why we go back there quite often.


Joel: We have a lot of sarcasm on this show, Andrea.


Andrea Derler: Oh, I see.


Joel: I don't know.


Andrea Derler: I'm sorry. I didn't catch, yeah.


Joel: Yeah. Didn't catch on. Andrea has a PhD, so she's like, what am I doing here?


Chad: Well, she's Austria and that's not... Sarcasm isn't really baked into it, so yeah.


Andrea Derler: No, we are very dry and boring people. Usually, that's my one of...


Joel: I will ask the questions. All right, Andrea, we know more about you. Some don't know Visier and what you guys do. So talk a little bit about that and we'll get into some specific topic that you recently wrote about on LinkedIn.


Andrea Derler: This is the leader in people analytics, according to George Person, for sure. So we are a people analytics company. That means we have about 25,000 customers around the world who load their data from their human resource information systems into Visier to do people analytics. Meaning to understand some of the relationships between, for example, retention and diversity, productivity and business outcomes.


Chad: How many people does that represent? Because obviously under those companies you have many... How many people are you getting data points from?


Andrea Derler: Yeah. It's growing every week, but it's currently at about 17 million employee records. That means people working...


Chad: God.


Andrea Derler: In companies around the world, 17 million.


Joel: That is a lot.


Chad: That is huge. Now, I have this amazing business insider, layoffs can cause contagion, that pushes workers who are left behind to quit. This is something that... We talk about attrition on the show, right? We talked about Amazon and their attrition, and it's actually cost them billions and billions of dollars. Why is our industry... Why are companies not paying more attention to this? I mean, layoffs are one thing, but what about the actual attrition that comes along with that? Because it sounds like it's inherent.


Andrea Derler: I think many just don't know. We've discovered this phenomenon in our data, because we actively looked for it. We wanted to understand is a resignation or a layoff of a person, an isolated event or does it actually affect the people around them? And because we are studying the humans behind the data, we found like, let's see if team members are affected by one person's either resignation or layoff event. And we did find that there is an effect on others. And if you think about this, naturally there would be. If you're losing your colleague, through whatever reason, it affects you in many ways. Either you have to do their job now, or your work is being completely changed, every process is being turned upside down, or you simply miss them and you need them to be successful yourself. So you're suddenly considering, well, if they're not here anymore, what am I doing here? And I think, that's the component we just haven't really paid enough attention to. It's as simple as that. We didn't know and we had no way to prove it.


Chad: Right. Right. So turnover is contagious in this case. And did you guys coin the term turnover contagion, or did that exist already?


Andrea Derler: The term has existed before. So what I like to do is I like to... I'm a little bit of a nerd, so I do read academic articles, and when we started turnover in general...


Chad: Oh, you're the person that does that. Okay.


Andrea Derler: Yeah. I do that sometimes, because you find really interesting nuggets such as turnover contagion as a term, where we then said, okay, can we prove that this is happening? That it's an actual phenomenon in our vast database. So the term has existed before. It has different words. Sometimes they call it collective turnover. It's always affects on... Social effects basically on teamed members around a person who's leaving. Turnover Research is about a 100 years old, so there is lots more nuggets we can probably test. But that particular one interested us, because we started the resignation wave that started in 2020, and that's when we came to the turnover contagion as a phenomenon.


Joel: So when you say contagion, I obviously think COVID, they're not connected whatsoever. But we're in a remote world, and when I hear what's going on and you see people in jobs, maybe yours now, that you didn't have before, how has working remotely impacted this? I could see where, hey, the New York office had a big layoff, and because I actually know these people and we go out for drinks, there's more of a contagion there. But if my New York coworkers get laid off and in I'm in Boise, Idaho, is it less contagious because I'm geographically in a different place?


Chad: Because you're not really connected to those people? Is that what you're saying?


Joel: Correct. How has remote work impacted the contagion?


Andrea Derler: The assumption, based on what we found, we tested this in a timeframe between February, 2019, so before the pandemic until October, 2020, to have that time to calculate everything. We don't know if there's an actual effect of the pandemic on this or hybrid work. However, the way we know that people are connected, even regardless of where they live, is are they're working for the same manager, for example, belonging to a certain team is how we defined team. So that's why if a random person leaves that's living someplace else, or even not even works within that same team, that effect does not exist. That's how we tested it. The only reason we know that turnover is contagious is because we could see who's been working on the same team. So when their team member left, that's when their team, their peers were affected. That's exactly how we proved that regardless of where you are, if you're a member of the same team... I've worked remotely for the last 10 years. I have very close relationships with my peers who are on the other side of the country, sometimes in the other side of the world. But if one of them leaves and I depend on their work to be successful myself, doesn't matter where they are. So my hypothesis would be that the effects of remote are probably, weaker. It's more important who you are connected with and how strong the relationship is.


Joel: Is the opposite true? If people being laid off leads to people quitting? Does greater retention lead to more people staying?


Andrea Derler: It's actually not a mirror image of each other from what I've learned here. So we haven't looked at that. The draw certainly was away from the company, which is different from why am I staying? So that's not... So the reasons why I'm staying at a certain place are not the same as why I'm leaving a place. So that's what we've learned too and academics have written quite a bit about that. I don't know, to be honest, we can't really say if these are the same reasons. I think, it's more about, and that's what fascinates me about this topic, is the social impact, the relationships, that bonding experience, again, beyond the office can be pretty strong. So if somebody's being let go, that the effect is a bit weaker than if somebody actively leaves, which is that resignation. That's why we found different effect sizes.


Joel: When you do that study and publish it, let us know. Maybe we'll have you back talking about that.


Andrea Derler: Okay. I promise.


Joel: When it comes to the company, in the report, you'd said that, if you do a layoff, expect another at least 7% to leave. In this case, do you think they were, those individuals that were leaving, this contagion piece was, they were just ready to in the first place? Or I might as well leave before they cut me. Do we know any reasons or we just know the data is that if there's a layoff, at least 7% are gonna go?


Andrea Derler: The way I think about that is, again, based on academic research, because we don't know why the people in our own sample left. That's... Would be something we have to study later. But there is something like a shock effect, a trigger. Something happens, somebody around me is being let go in the case of layoffs and that's a shock event. Was I ready to leave before? Maybe, but maybe that's not even important because that shock event, that's really what shakes me. That's what makes me wanna leave. That's where survey data meets our data sometimes, that we have seen lots of surveys, who said 40% of people are going to leave next year? You remember that? We saw that in industry publications. That was based on surveys, but survey... And our intention to leave, me wanting to, planning to, maybe not always happy, sometimes frustrated is not by any means the same as me actually handing in my resignation tomorrow. So we don't really know always the reasons of why people now are suddenly triggered to leave. Layoffs is certainly a shock event, but if one of your best colleagues... Chad, if Joel were to leave tomorrow, you'd be really shocked. Right? And so you'd figure it out, what am I still doing here?


Chad: Oh, yes. I would be very shocked.


[music]


SFX: Hey, it's Corona time right now.


Chad: I have to get some Corona. Yeah.


Joel: He'd be all right. I think.


Chad: Is there any correlation between, and I don't know if you've actually run these numbers or not, but if there are positions that have been open long on that team, obviously you're starting to spread those people that stayed too thin. Right? Have you started to take a look at the actual data around the open positions? The longer they're open, the more people that actually go out the back door because again, they're just being worked too hard?


Andrea Derler: Yeah. This would be all subject to more research, to be honest. I think the first step, and I keep saying we have to do more. I just wanted to point out how unique it is that we even could find an effect. There are hundreds of studies, based on survey and academic research that showed that turnover contagion is a possibility. But we did an experiment to even see that there is an effect that we saw people leaving because of the_ was a really big importance next step. There are many other questions that open up, that we need to explore further. I think what's probably important and interesting is, what does this mean for the manager? What can they do? What's also interesting is when does it actually happen? When is the effect the strongest? Because it's not forever. Your team members don't leave in the next two years after that first resignation. We saw very specifically, this happens immediately after, on day one, of a person's resignation, once this becomes known.


Joel: What advice would you give a company? I know you're not a marketer, but what would the spin be if you were on the end of the company, in terms of trying to put out any kind of contagion quickly? Is there something companies should say to sort of turn the temperature down on people sort of freaking out and taking off?


Andrea Derler: Oh, that's top of our mind. So our research doesn't exist in the bubble. That's particularly important in terms of what can an organization or managers do. The first one is, immediately look at the risk of exit profiles for the remaining team members on that team. That should be something that hiring managers do all the time. And you're looking, basically you're asking yourself, who is my top talent? That sounds a bit mean, but I think that's how we all think. Who are the most important people on my team? Who do I certainly not wanna see leaving as well? You look at their risk of exit profile, you see, when was the last promotion, what's their compensation? When was their last pay raise? How long have they been in the job? What's their tenure? Where do they live? But also I think most interestingly, is now in the hybrid world, you mentioned that what managers can do now with technology is to see how engaged are people. What do I know about their, let's say, collaboration with others? What do I know about their potential burnout? What do I know about their work patterns, their daily work patterns? Have they changed? Can I detect any changes in how my people are working every day?


Andrea Derler: And so that's something that should always be top of mind. But I think in a resignation event, if I have somebody who is leaving, I have to think immediately about what impact this potentially could have on others. So I do wanna have that open conversation. First, I check the data, but then I should actually, address it heads on.


Joel: I was expecting sort of a rah-rah locker room speech from the CEO. And what I got from you was sort of a really personalized employee by employee strategy of how is each one going to hopefully stick around. That was an answer I wasn't expecting. So I appreciate that. Now, if I flip it on the other side, and Chad and I do in this show, we know that companies tend to be evil sometimes.


Chad: Twitter, Elon Musk.


Joel: So my question is, are companies putting contagion in their calculus when they do layoffs? In other words, if I know that 5% are gonna leave, if I lay off 20%. If I want 25% to leave, do I just lay off 20 and then I know the other 5% are gonna leave and I don't have to pay them severance and all the other stuff. Are companies thinking about contagion when they do layoffs, hoping that more will leave so they come down a little bit and wait for the others to leave after?


Andrea Derler: I think we should ask that question to a CHRO because that's a question that I can't answer. I don't think they have done it so far.


Joel: What do you think though?


Andrea Derler: I don't think so. I don't think that the awareness was there before. Maybe they thought maybe it's possible, they were hoping secretly that this will happen in some cases. But then again, how do you control who's gonna leave? You want your top talent to stay, you don't want your top people to be part of that. Right. That's why it's a little dangerous and risky if you were to do that, because you don't know who's gonna leave.


Chad: Right. Makes sense. So, I guess when we're talking about those people, obviously leaving, not knowing whether they're gonna be your top talent or not top talent, and they're sure at this point aren't correlations yet, but this starts the conversation. I think this data starts the conversation for TA leaders and thinking, okay, well if some of my top talent leaves, not only is it going to be bad for others wanting to leave, but they might have had more of the load, the workload, than others, so therefore they're going to spread people too thin. I mean, it's one of those things where we have to look at resources, and I just don't think that many CHROs obviously are even thinking about the contagion effect and how deep it goes. Do you think they are, or is this something incredibly new for them right now because of all these resignations that we've seen over the past few years?


Andrea Derler: I love that you're bringing up the talent acquisition function there, because that was something on my mind that I've [0:15:45.7] ____ on. If you know, for example, a team in another company, who have been chasing talent. That's certainly one way to track who's leaving at that company and to see if there are other people that I'd like to kind of have a conversation with about potentially interviewing or are considering other roles. Again, that's the power of people analytics that we are starting to learn about those dynamics right now. We are starting to learn about those phenomena and what they mean for other functions. For example, we know that there's a significant amount of rehires of boomerang employees, that has a lot of implications for talent acquisition, right? Because I may hire people, but then how do I keep them on as long as they actually get embedded in the organization? Or are they leaving within the next three months again and going back to the previous employer? So the retention starts with the hiring, of course, right? So who do I need to keep? How long do I need to keep them on, and what's the risk of them boomeranging back to their previous employer.


Andrea Derler: So we have talent management, we have talent acquisition, employee experience, HR function needing to work together because this is becoming a more and more complex problem now. So I think the way you're thinking about this is also how we've been thinking about that. What does this mean for talent acquisition? Not just about hiring and recruitment, but also, what do I need to know and how can I attract teams and team members in my target organizations?


Chad: Right. One thing you didn't mention was internal mobility, which is incredibly big. But again, something that just here, recently, we've started to put more emphasis on. So being able to demonstrate to the actual employee that, Hey, look, we value you. We want you to stay. Here's what your career path looks like. Here's some opportunities for education. Right? Those types of things. And being able to demonstrate that, okay, this isn't all on you. This is a team effort. If you're talking to someone in TA about this, or even just on the talent management side of the house, what is the biggest key for them, the biggest indicator for them to be looking at, for the possibility of somebody leaving the team? Is there anything in the data that actually says this is an event, that shock event? Is it pretty much just you're seeing layoffs or is there another shock event?


Andrea Derler: I think from what we learned from other analysis we did, is internal mobility is still lagging behind vastly when we compare external versus internal. So that's clear. I think the biggest indicator, we interviewed a couple of boomerang employees and wanted to know why did you leave in the first place? Which is coming to the retention question, I think that you're asking, which is really, people get bored. The top talent that's sometimes resigning. And that's exactly, again, the problem. They get bored at their jobs, they wanna learn something new, they wanna do a little bit of a different role. So theoretically, internal mobility would be the key to... One, key to talent retention, including compensation. So mobility, learning... So the typical ones that we always have discussed, but what makes it so hard? A couple things. Of course, talent hoarding by managers has always been an issue. Who's gonna wanting to let go talent that they really need and want, and probably even really like, and get on with really well. So that's becomes a systemic problem you take in, asking an individual manager to let go of somebody who they actually really need on their team.


Andrea Derler: So that's an issue. I don't know how much organizations know these days about the skills that those employees actually have. How much do we know, which roles my employee can actually take in my company? The way CV is sometimes processed, or I mean, curriculum vitaes or even experiences and skills summaries are not very comprehensive sometimes. So I don't know what other skills you have, what do you know about what other skills I have? I've been in sales for a very long time before I became a researcher. Nobody usually knows that. So knowing about what my people can do, versus what they actually currently do, is one of the key problems I think that organizations have. They're working on that right now. As you know, skills technologies are becoming more prevalent now, but it's a complex problem that needs a lot of brains working together.


Chad: Well, it's what they want to do as well, right? I mean, they... You know what they can do, but they might wanna pivot into... If you were in sales, you might wanna pivot into marketing, right? Or something of that nature. From an internal mobility standpoint, are we thinking too much about ourself and what we need as the company, as opposed to what the employee needs? Because again, they're gonna get bored and then they're gonna leave, and if they leave, there's high likelihood that another 7% or plus would leave with them...


Andrea Derler: But that's really comes down to, again, the manager understanding their team members, right? So you're right. We should always consider what the person wants. That's always been an ever occurring problem because they just don't know. I think what I learned from interviews of people who I interviewed for the boomerang research last year, was the primary reason of why they left was, I just wanna do a little bit more. It's not sometimes a radical change that people want to do, but just learn a little more. Make that next best step. People are incredibly positive usually about the way they work. I mean, I'm not... I'm overgeneralizing here, but my position's always been that, in general, people want to work, want to do a good job, want to perform, most of them. And so, give them that opportunity to maybe contribute to a project outside of their realm. It doesn't have to be complicated, doesn't have to be complex.


Andrea Derler: But we are going into psychological safety. Now, again, am I going to my manager and talk to them about that I'm bored at work. Do I feel I can do that? Do I feel that or should I go to HR? Who do I speak to about this? I think that systems and processes need to be in place, that support managers, to have those conversations transparently. But I agree with you. I think that's a complete close circle. How do we keep people? What do we know about them? What don't we know about them? And so far, certainly we have not known about the social collective impact of anyone being a little frustrated and actually leaving their jobs.


Chad: You mentioned shock to the system. Is there any data... What would your thesis be around multiple rounds of layoffs? In other words, one round of layoff, you see a certain level of contagion. If there's another round of layoffs, does contagion go up more because there's more layoffs and more fear in the workforce?


Andrea Derler: I think that would be another really good question. I mean, I can only hypothesize around that. Of course, when we think about psychological impact of turnover, caused by layoffs in particular, what it causes in people is an incredible big sense of uncertainty, right? Fear, uncertainty. This goes way beyond, can I keep my job? But it's what's... When is it gonna happen to me next? So we would assume that the probability of more people resigning after layoffs would go up only because of that sense of uncertainty, but it will depend on the industry as well. Of course, we see industry differences, and how easy is it going to be for me to find a job someplace else, or I'm just gonna wait it out? So I think we'll see probably variations in industries, probably in education levels, probably in skills as well. What can I do someplace else versus why do I have to stick around? But in general, we would expect that this goes up because people are, of course, particularly in the US where there's not a really strong social safety net, where you don't get a lot of unemployment benefit, it's becoming a life and death situation for some people. Can I survive with my family?


Chad: So the recommendation would be, if you're gonna do a round of layoffs, get it done in one sort of action instead of drawing it out into multiple rounds of layoffs. Yes or no?


Andrea Derler: Can we do another podcast in a couple of months because we are studying layoffs next? Actually we're looking...


Chad: Oh, of course.


Andrea Derler: Into this right now. We'll have a lot more data around when are layoffs happening, which industry is the most affected, which kind of demographics are most affected? And I'm actually trying to interview managers about what made the decision happen in the first place? What played into the decision making process? So the layoff conversation is a whole different other beast that we are tackling because it's happening quite prevalently right now.


Joel: We'll put a pin in that one.


Andrea Derler: Yep.


Joel: The media plays into this, I think, you mentioned the great resignation and if you go to Google Trends, the term the great resignation spiked in 2021. It has since collapsed in terms of media mentions of it. You're seeing the great regret start to go up, right? Everyone's regretting resigning. How much does media play into people's decisions to stay or go at a company?


Andrea Derler: I love that question. I think what media outlets underestimate is that impact that they have on how people feel, the sentiment about work. I'm always really concerned about that, because it may just really, sometimes, make a problem worse. The great resignation did happen. It's now gone down in numbers. We are tracking resignation rates monthly based on our data, on our database as well. So yes, resignations are down. In terms of the great regrets, interestingly, we've found that people really regretting and going back to their previous employer has been steady over the last four years. So that has not changed much. We see that about a quarter of hires, new hires, are actually rehires. That was higher than we expected. Whether that's regret or not, it's hard to say. It varies by industry as well, but it's been quite steady over the last four years. What's probably more interesting currently is to see how long is that whole recession talk and layoff talk gonna last, because I think compensation's gonna be the next big topic.


Andrea Derler: If we are trying to keep people, particularly in some regions of the world, we need to think about compensation. How much do organizations really need to ramp up their compensation and pay for new hires and existing hires until the breaking point? And at which point does that affect actually fade away? How much do I need to pay Andrea so that she stays, but at some point, she's gonna leave anyway.


Chad: Yeah.


Andrea Derler: So I think that makes sense. That's the next big topic that we want to see after layoffs even to understand what role does pay really play in retention?


Chad: I'll let you out on this. You mentioned in your article that smaller teams are at greater risk of contagion. Why is that?


Andrea Derler: We've consulted a psychologist on this and the common opinion is that the smaller teams have just more coherence. They know each other better. They're in a closer relationship. That sounds pretty obvious to all of us. That's probably at the core. I think, their work process are also probably more intertwined. So if my colleague leaves and I really depend on them in my smaller team, because we do work together almost every day, that's why the effect is probably stronger for smaller teams than for larger teams beyond 20 or 30 people where the effect is much smaller because people don't necessarily... You won't have 30 people working on one project for a very long time together that closely. Even though the effect is still there, there're still an effect for larger teams, but it's that bonding experience and that necessity of us doing something together to be successful kind of sentiment that makes that effect stronger for smaller teams is our hypothesis.


[applause]


Chad: Well, Andrea, we appreciate you coming along, talking to us about turnover, contagion, all these wonderful things. I've gotta go get a shot now. If somebody wants to find out more about you or they wanna link up with you or they wanna find out more about this data and the statistics, where would you send them?


Andrea Derler: We have a report that can be downloaded on our Visier website. I also have published this a lot on LinkedIn, so you can follow us on LinkedIn. You can follow Visier on LinkedIn or me personally, Andrea Derler, and there's lots of media attention around this. You'll just type in Visier turnover contagion, and you'll find lots of interesting articles and links.


Joel: Quitting contagion. Don't stand so close to me, Chad. Another one is in the books. Andrea, thanks for joining us today. We out.


Chad: We out.


Outro: Thank you for listening to, what's it called? A podcast, the Chad, the Cheese. Brilliant. They talk about recruiting. They talk about technology. But most of all, they talk about nothing. Just a lot of shout outs of people you don't even know. And yet you're listening. It's incredible. And not one word about cheese, not one cheddar, blue, nacho, pepperjack, Swiss, so many cheeses and not one word. So weird. Anywho, be sure to subscribe today on iTunes, Spotify, Google Play or wherever you listen to your podcasts. That way you won't miss an episode. And while you're at it, visit www.chadchees.com. Just don't expect to find any recipes for grilled cheese. It's so weird. We out.


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