Fluctuation was always a success-determining factor of business life, but it was never as critical as it has been in the last 8-10 years. Naturally, this change is the consequence of several significant coefficients of the labour market. However, before we start analysing fluctuation as a phenomenon in order to find techniques and solutions, we have an important obligation: we must forget all clichés and generalisations about people, as the most significant reason behind worsening fluctuation is that we like to pigeonhole people.
Yes, we are diverse
No serious business essay should start with banal sayings, but the root, and thus the solution of the problem, is found in the fact that when examining labour market labour market phenomena, we do tend to treat people as homogeneous masses. ‘People who stick with their companies: they are loyal!’ ‘People who change jobs often: they are untrustworthy!’ ‘Anyone would quit this job sooner or later, it is too monotonous!’ And numerous other clichés, heard every day. We don’t tend to notice, but such expressions suggest that everyone is alike. This is not really a problem while the given economic area is enjoying a generally peaceful period, but, in this case, on the labour market, sooner or later we find people to whom our generalisations apply. Done. We can rest easy, we were right. Even though reality proves the exact opposite. If a given occurrence can be attributed to human characteristics, clichés simply won’t apply. Loyalty, resistance to monotony, and the fluctuations we are now discussing are directly connected to one or more personal characteristics. This also means that clearly identifiable differences can be found between individuals. Trying to isolate a single issue from all the complexity and examining it separately can be very difficult. This is especially true in the case of fluctuation, which materialises as an aggregate effect of several defining characteristics. Fluctuation in a given workplace or job role can be clearly attributed to the effects of the work environment on personal characteristics. Even if we are using the simplest behaviour assessment systems, we will find that they define at least four major personality categories. The RISE system, for example, identifies 8640 subcategories, but, when accounting for diverse characteristics, can identify up to 1 million personal characteristics combinations. Well, fluctuation is just as ‘homogeneous’. If fluctuation has taken shape in 8640 ways, and we were able to establish 1 million various management techniques, we will have achieved zero fluctuation at the given workplace. What an ideal state, right? In the following, I will provide experience-based proof for my statements. Of course, I want to make it clear, right away, that the size, number of employees, and many other attributes of the company will affect how much the given employer wants to diversify its motivational environment, or rather what tools is it willing to use and sacrifices it will make in order to minimise fluctuation. Another question is that, from a professional HR or business strategy standpoint, whether it is even healthy for the company to ensure that there is no fluctuation. However, the most important lesson from all this is yes, we are able to reduce fluctuation within our business as much as we want. To accomplish this, however, we must know our employees, the concrete motivational messages behind positions we offer, and how the company communicates to people with various personalities. Naturally, it also helps to know how these factors relate to one another!
Just a note
I would never have thought that I would be writing a business essay on fluctuation management, since, during my 16-year career in business development, it was never a serious concern. This proved true, even though while working with the companies I help develop I’ve experienced the situations of a wide range of sectors. I had and have partners from finance, IT, media, manufacturing, FMCG, insurance, construction, cosmetics, fashion, medicine, and several other markets, and, moreover, even the sizes of developed companies varied, from local 12-person micro-enterprises to international companies with more than 10 000 employees. Since the purpose of our work lies in complex business development, fluctuation was always seen as a strategy, or a process controlled by our client, with planned and achieved results. I’m not trying to say that the management professionals in companies with high fluctuation do not know what they are doing. Not at all! I only want to call attention to the fact that this issue requires a complex solution and can be easily misinterpreted when working unaided. Isolating it from other business tasks and treating it independently can hardly lead to positive results.
The unmanageable IT market
Many of our partners operate in the IT sector, in which the severe labour shortage is the most significant challenge they face. It doesn’t take long for young employees to move on if something is not to their liking since they can immediately find ten similar, equivalent offers in the country or even abroad. Most companies complain about not being able to hold on to their best professionals, as their competitors are offering 20-30% more and are poaching them. Nevertheless, in 2018, our IT partners participating in our business development programs have shown an average fluctuation of 1.2%. The challenge represented by 2019 concerns enhancing the dynamics of corporations, as some change is necessary to ensure continuous development, and as creative progress is hindered by a static workforce. Of course, we don’t have to start tearing down the company, valuable personnel must be held on to, but a counterselection may be supported. We could end up thinking that some of these companies are in excellent positions, so they must be overpaying their employees, but this is not the case. Average income at these companies is 22% below the level defined by the market. So, what is it that makes these companies special? What makes them so much different from others? We rank these factors in the course of our work. First and foremost, all positions can be described in a way suited for specific characteristics. It is critically important to note that we are not talking about ‘general profiling’, which is generally based on behaviour. Instead, these concern the definitions of concrete characteristics. Our personality type does not significantly change in the course of our lifetime (although, naturally, traumas and psychologically significant events modify it), altogether it makes for a balanced and reliable basis for planning the creation of work profiles. Since these companies hire employees based on personality profiles, they provide for a fundamental requirement, that is that the employees do not need to change, play roles, lie to their employees or themselves to be able to perform their work at the appropriate level. Since fluctuation is defined by an inclination and willingness to change jobs, and changing jobs represents a kind of crisis in the employee’s life, if their profiles are based on attributes defined for the given role and if personality type, as the factor defining decision-making in a time of crisis, and is reviewed upon recruitment, the work profile can suit the employee’s personality type and fluctuation can be reduced to 0%.
The second distinction after personality profiles was the image of the company. In regards of fluctuation, this consists of two elements: the domestic and, particularly, the international professional reputation of the company and the uniqueness of the work performed by the company, likewise considered in a domestic and primarily international context. Seeing a certain IT company enter the international stage and reduce their already low fluctuation to zero percent within two months was an important lesson for us.
Personality types and fluctuation
In order to understand the origins of fluctuation, we must explore the major requirements certain personality types have towards their work. If we only take the four major personality types and rely on the RISE system, we can reach the following fundamental conclusions.
RULER-type people are primarily seeking status, position, career. They see money as an essential factor in recognition, but not the most important one. They want to control people, have a dominant position. They are quite active employees, who are resistant to orders and superior-subordinate relationships. They are looking out for their own interests and base their decisions on these. They are capable of peak performance, but not to continually maintain good performance. This type is competitive and finds routine maddening. Their presence in manufacturing companies can be a great challenge, since although the RULER wants to lead, it might not get to do so. They find simple, manual work degrading and can’t come to terms with such situations. In the short term, they are able to put aside their egos for money but cannot stay in such jobs for long. Manufacturing companies more and more often resort to transporting their workforces, often having their employees travel more than 100 km from their homes to their places of work. They repeatedly see the fundamentally enterprising RULERs give in, accept such positions, perform well at first, but leave their jobs for another just when their training and placement would become profitable. Of course, there is always a perfect excuse, which the honest-working HR employees smartly record. Then they base development on it. But in this case, all such developments are unnecessary. RULER-type physical workers should always be considered short-term employees; no development can change this.
INDIVIDUAL-type people are creative, dynamic, motivating, love novelty and are always on the move. Even these basic requirements clearly identify the roles and positions they are suitable for. They are disorganised and chaotic but are great communicators. One day they are optimistic, another they are pessimistic. They find it very important to have a role and stage in the work community; otherwise they find life dull and the work unfulfilling. They are unable to accept any monotony and find rules hard to deal with. In any given system, they are looking for a way out. If their work environment is not changing, if things become stale, they move on. Naturally, it is easy to see that this type is the one contributing the most to high fluctuation rates. They are able to create great value for the company, but we must be aware of the fact that we cannot rely on them for long.
SUPPORTER-type people play a significant role in improving fluctuation rates. If their roles are properly defined and the requirements suit the SUPPORTER’s requirements, fluctuation can end up close to zero. This is because this type is looking for stability, which, according to them, is found in routine. They learn work processes and are able to repeat them under any circumstances. They are afraid of change and dislike excessive development, as this also leads to changes in their environments. The central point of their motivation is predictability, calculable demands, expectations, settings, and conditions. Moreover, they not only accept conditions, but their steady presence is essential for them. They have a great and enduring work capacity and are able to shoulder any workload without complaint. In this regard, they are an employer’s dream in regards to monotonous, simply planned roles requiring a constant human presence.
EXPERT-type people make for very stable employees. While the SUPPORTER will stay under any circumstances if stability is present, EXPERTs will only stay at a workplace if the work environment and, particularly, leadership meet their professional expectations. They cannot bear to work with hacks and cannot take working under incompetent management. They think in systems and work as part of the system. They are perfectionists and expect the same from others. They dislike changing jobs and almost never leave their professional fields. Professional improvement and an organised, systemised work environment are their most significant expectations. It is vital for them to judge people based on their professional knowledge, they are unable to interpret and dislike emotional language. They continuously develop not only themselves but their work environments so it can be rewarding to treat them as partners.
So be a wise girl!
Upon considering these four major personality types, we will soon discover that designing a work environment suitable for all people is almost impossible. Creating conditions that are simultaneously varied enough for INDIVIDUALs, but at the same type completely unchanging for the SUPPORTERs… well, that’s a tough hill to climb. All the while, the company should have an image, status, as expected by RULERs, but it should not have too strong of an image, as the SUPPORTER finds it repulsive. Or, focusing on the other two personality types, we should ensure that, on the one hand, the company operates in a completely ordered, systemized, regulated manner, as this is the only way to keep the EXPERTs at the company, while, on the other hand, we should not always enforce the rules, as that would scare away INDIVIDUAL employees.
However, Hungarian folklore provides an answer for us, as King Matthias Corvinus once posed a similar dilemma: he asked for someone to give him a gift and do not. Then and there, the witty country girl solved the riddle. She brought a dove for the king, only to release the dove in front of him, allowing it to fly away. I think you will agree that the problem fluctuation represents is a bit more complicated and vital.
What do we have to do to find a solution? There are two methods for the long-term, sustainable reduction of fluctuation that provide exceptional results. One direction takes the corporate environment as a basis and adapts requirements towards employees and, particularly, their respective personality types. This means examining or having experts examine the corporate environment and concretely establishing a suitable personality profile or profiles. Here, it is also important to emphasise the importance of the original personality type, as if we lose track of it, fluctuation will only be managed in the short-term, and there will be no real results. When the profiles are ready, all we have to do is strictly enforce these principles during the recruitment process. I know what you’re asking: what happens if I can’t meet staff requirements this way? There are two solutions available in this case as well. One way is to change expectations towards the workplace, position and thus cast a wider net, attract more people and keep them there. This leads to good, long-term results in fluctuation. The other way is to include employees whose requirements for staying in the given role we know we can’t meet. Understanding this, we know that, sooner or later, they will leave the company, but meanwhile they will help provide the necessary manpower. The only problem with this latter solution is that we cannot expressly affect changes and terminations, as we are turning over control to external circumstances. For example, if a new position opens up, the RULER will immediately quit, and the INDIVIDUAL won’t stick around for long either…
The other solution is to examine labour market conditions and opportunities and then adjust the work environment accordingly. We have to understand beforehand that we must be able to produce the given quality of work, workforce, or staff while ensuring adequate production quality. We must also know the personality type composition of the locally available workforce so that we will be able to clearly define profile directions, which in turn will immediately show what type of environment we must establish at the workplace. In the last 8-10 years, considering the international development of the labour market, companies have mostly relied on this latter direction, ensuring predictable production. This, of course, is a more significant challenge for international corporations, as they have a central image, corporate identity to which they must adhere to. Today, more and more central offices of international corporations recognise that decision-making in recruitment, headhunting must be delegated to local management, and that a certain level of freedom must be provided in the adjustment of work conditions. Everyone who has ever worked for an international corporation knows well that a good, smart, and strong local manager fundamentally, and to various extents, defines working conditions while reforming the workplace in its own image.
Still, many people think that, when talking about fluctuation, their situations can be blamed on market conditions, with few people ever realising what direction they have to take to find a real solution to the problem. Naturally, the sluggishness of the process is somewhat justified by frequent changes in the labour market, and many people try to wait it out. Based on our experiences, the state of the labour market in 2018 is not the low point at the end of the slope. We think that the complex management of this situation will fundamentally define business success for the next 10 years. The HR profession plays a unique role in this and must become able to exceed its own limits. We know that many people are looking for a real solution. We see and hear that many have been disappointed by the traditional methods. What is especially interesting to me is that this area shows no significant difference between manufacturing firms employing tens of thousands of people and super elite IT companies. No matter the industry, if the right professional is working in the right position, they will want a complex solution and will seek suitable systems. I meet more and more of these professionals during my work, and this summary was partially inspired by their thoughts.