Why Great Employees Really Leave | Dick Finnegan

Employee turnover isn't just expensive, it's often preventable.

In this episode of The Entrepreneur's Studio, Chris Allen sits down with employee retention expert Dick Finnegan to discuss why most organizations approach retention the wrong way. Drawing from decades of experience helping companies around the world reduce turnover, Dick explains why accountability starts with managers—not HR—and why building trust is the single biggest factor in keeping great employees.

From practical leadership frameworks to unforgettable stories from global consulting engagements, this conversation is packed with actionable advice for founders, executives, HR leaders, and people managers who want to build stronger teams and reduce costly turnover.

In this episode, you'll learn:

•  Why manager accountability has a greater impact on retention than employee engagement surveys. 
•  How Stay Interviews uncover issues before employees decide to leave. 
•  Practical leadership habits that build trust, improve engagement, and reduce turnover. 

Resources & Links

Learn more about Dick Finnegan: 

https://www.finneganinstitute.com/

https://www.auris.io/

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The Entrepreneur’s Studio is sponsored by Auris, helping small and mid-sized businesses simplify payroll and HR with powerful tools and real human support. Learn more at https://www.auris.io 

Transcript

SPEAKER_01 0:22

The number one reason employees stay or leave or engage or disengage is how much they trust their boss. And for us, everything happens on that level.

Chris Allen 0:32

Dick Finnegan has done something most consultants only dream about. He took a single counterintuitive insight, built a repeatable system around it, and has now helped organizations around the world stop the costly bleeding of losing great people. Dick is not only a best-selling author and sought-after-speaker, but he's also considered by many as the global turnover expert, having cut turnover by more than 30% across various industries. In our conversation, Dick shares his insights on winning the workforce crisis and what leaders can do today to solve the critical business issue of employee retention. I'm Chris Allen, and this is the Entrepreneur Studio Podcast helping you run and grow a better business. This isn't your first time, right? 20 plus. And now today you're known as the leading expert in employer retention. So you you got to unpack it for everybody. How did this become a thing for you?

SPEAKER_01 1:52

Well, it's a fun story when I look back on it. I I'm a therapist by trading. I got into HR by accident, like many people do. I actually live in Orlando, Chris. So right 12 miles down the road in downtown at a big high rise, I was head of HR for a big banking company. The CEO called me to his office one Monday morning and said, Turnover's high, go fix it. You're HR. I don't know what you're gonna do, but I can count it, and you better fix it. And this man had been an Air Force lieutenant, but also a cheerleader at the University of Florida. And you never knew if you were going to get a figure in the face, which often I did, or this. Okay. And so my position was you know, we've done all the HR stuff. We've done engagement surveys, exosurveys, everything ends in a survey, we've done them. Maybe the managers are the problem. Well, that was not popular. And so he made it clear I was to leave his office, which I did, and the next day he checked with our my colleagues to see if I should be fired because I'd been disobedient. But eventually I met with the head of all the think about a bank, it's a whole bunch of branches. They all look the same, they all have the same shingles. The only variable is the manager. So I took a map of Florida. I, for every branch, I put the name of the manager and the turnover percent. And I went to the person who oversaw the branches, and I said, I don't think this is an HR thing. Look, two miles down the road, turnover is twice as high as this other building. And so eventually we met with the managers and gave them a goal to cut turnover, and they were astonished. And of course, they said privately, the pay sucks, the benefits suck, probably we suck. And we stuck to our guns, and turnover kept falling and falling and falling and falling and falling, and we did nothing but hold them accountable. And after nine months, the CEO said, hey, the managers are complaining about this turnover thing. I think we have it fixed. We don't have to track it anymore.

Chris Allen 4:06

Okay.

SPEAKER_01 4:06

And like a beach ball underwater, shh, turnover went back up. So I learned a big lesson. A big lesson I learned was roughly speaking, everything I learned in HR about turnover is wrong unless the managers are accountable for it. And so one thing led to another, to another, to another. I got a new CEO. I got a job offer from KPMG to work around the world. Uh the CEO said, you have to take this job. So I took a part-time job. So for years I had a full-time job as head of HR and a part-time job working around the world. And it led me to cutting turnover in Siberia, four kilometers deep in an African gold mine, which I'd never do again, uh, across China several times on all six inhabited continents. And I was commissioned by the CIA to cut employee turnover, and I could walk into Langley with my driver's license. So I did all those things, then I began writing books. The key thing to all this, believe it or not, is yet to come, which is I found a professor of industrial psychology who was interested in cutting turnover. His name is Murphy. My name is Finnegan, our jokus, we met on St. Patrick's Day. And Murphy was fabulous because he kept sending me studies after study after study. The first study he sent to me was top performers outperform average performers by four to one. And if you really chew on that, it kind of draws a line through employee engagement surveys.

Chris Allen 5:41

For sure.

SPEAKER_01 5:42

Because they treat everybody the same, they create one size fits all programs. You don't know what the person you need the most needs versus the person you're going to fire tomorrow. And it causes companies to, for example, say, Well, we really have to fix recognition. If we'll get a task force, a committee, the committee comes in and says, We got it. Ploy the month, ploy the year, employee appreciation week, get a backpack at five years, get a clock at 10, you do it, you serve again next year. Nothing's any different. The joke line I say sometimes when I speak is when's the last time you heard a really good employee say, My boss treats me like dirt, but I'm holding on for employee appreciation week. You know, I'll get a balloon and a hot dog, and I'll be set for another year.

Chris Allen 6:26

Yeah, or sheet cake in the break room. I love that one. Um, the thing that the thing that uh uh and a KPMG literally said that to me a couple of years ago when we were closing on a on a deal and they were like, you should have a sheet cake in the break room. I was like, okay, that's not gonna keep people around. Uh but you know, the thing that you've done, there's a lot of magic in what you've done, but what's sort of the what's sort of the red thread? I mean, you've been all over the world doing this, you've done it in big and small organizations. Right. What's the sort of through line that that you've observed uh that I think that can be a really helpful takeaway for all of us?

SPEAKER_01 7:00

Right. So we use a model, and there's five components. The first component is we have an algorithm to put a cost on turnover. We require finance to participate or it's worthless. And the thinking behind it is if you say to the CEO, our turnover is 15%, the benchmark is 20%, the CEO will say, great. If you say our turnover is 15%, Chris, the benchmark is 20, and it costs $26.4 million, the CEO says we have to fix it. So this benchmark thing is really not usable because it becomes the standard. It's like if we can be average, we're really good. And we got to get much better than average. So we put into dollars to pour a bucket of ice water over CEOs' heads. Then we establish retention goals, usually reduce current turnover by 20%, not 20 points, but 20. So if it's 30 percent, 20% is six down to 24%. But also we set a goal to improve new hire retention. And by those two goals, we then say, now we have a cost model. We know if we make these goals, we are saving this much money. So once we win over the operation side and the finance side, then we ask for one person to be the champion who has to be an executive, not an HR person. HR people, and I'm a recovering HR person. I love HR. But I know the reality is HR will say, we have trouble getting performance reviews. How are we going to get stay interviews? But when we have somebody with a hammer, we can get anything. So we train managers to do stay interviews, we train them how to forecast how long each individual employee will stay. Traffic light, simple. Green means more than a year, yellow six six to twelve months, or zero to six. But then we have two accountability metrics. We have each manager's performance against a turnover goal, and each manager's performance against their forecasts based on who leaves. And we literally get to where we say to a company, okay, based on all you these goals, you can lose this number, let's say six every month. That's all you can lose. So every month we have a phone call with the champion and the others, and we say, okay, how many did you lose last month? Why did you really lose them? What was their forecast? Who is their manager? How many are you going to lose this month? So the accountability part is like a screwdriver, a screw, and three boards. We just keep compressing those boards on accountability. And meanwhile, the stand reviews become the meat of the fixes because we train managers. We want you to have a plan for everybody on how you're going to keep them because you have a goal and we're tracking you.

Chris Allen 9:50

How do you sort of uh work with people to avoid this as an emergency, right? Like if you think about it with turnover not being an emergency and no one's measuring it, right? But at some point it may become an emergency. What are some of the things that we can do to maybe uh mitigate prior to it becoming an emergency, right? I that that's one of the ones that I think is an important one because if you think about it, you're you're talking about uh something that CEOs are like, this is an emergency now, right? Do you think that's e that it's possible to do it prior to emergency level?

SPEAKER_01 10:26

I think it is if the CEO has enough foresight to do it. But you know, the the employment market goes up and down, but healthcare companies will always need more nurses. Manufacturing companies will always need more workers on the floor. Food production companies will always need more workers. It's just an always thing in certain industries.

Chris Allen 10:50

So you have to uh measure it and manage it, right, is one of the biggest things. And it's got to be at the top and having a very sort of dollar value uh kind of orientation to it. What what are some of the ways that you've armed uh HR to help tell a better story about how to get something like this activated in their business?

SPEAKER_01 11:08

You know, that's the very thing I spoke on yesterday at this conference, which is you will not improve retention or engagement unless you drive manager accountability. You just won't. You'll keep thinking it's your job, just like the CEO said to me, you're HR, you got to fix it. I went home that day and worked on my resume. Uh but you have to do that. And if you begin with costing turnover and get finance to find a partner in finance who will buy in, who will see this as a real, you think about it. When Wall Street, reporting on Wall Street contains all sorts of data, but not turnover, it's as though it doesn't exist. It's not a cost. So if we can get HR to drive home the idea of costing turnover instead of focusing on benchmarks, and if we can get HR to study data to say, here's the real the real issue is we're losing people in the first 60 days, we're losing people in the first 90 days, then we're off. I'll tell you a great story is with a client company, manufacturing company that has nine locations in the U.S., they were losing half their new hires in the first 60 days. And so, you know, most consultants would say, well, let's find out why they're leaving and let's do focus groups, let's do surveys, let's do analysis. We didn't do any analysis. We just said, look, we're gonna set a goal to retain 80 percent in the first 60 days. But that goal is gonna be owned by the recruiters in each of the nine buildings who also had hiring authority. Each of the nine buildings had a new hire trainer who had new hires for the first four days. Each of the nine buildings had a group of team leads who were not exempt, but the head of manufacturing said, if you ask a worker who's your boss, they're gonna name a team lead. It doesn't matter how they get paid. And they all had supervisors. So we said to that group in each building, recruiter, trainer, team lead, supervisors, you all own this goal. You're gonna be accountable for this goal, and you're gonna meet once a week and you're gonna look at a list of everybody in the first 60 days, and you're gonna go around the table and say, Well, are they in training? Are they out of training? And they in the fourth week, the sixth week, the eighth week, who owns them? What's your plan? You have to get them to the finish line. Then we're gonna give you a second list of everybody who didn't get to the finish line, and you're gonna hold each other accountable. Recruiters, should you have let them in the door? Trainers, should you have graduated them? But between those two reports every week, we're gonna focus on accountability because it's your job. Well, all of turnover went down 42% in the first four months.

Chris Allen 13:53

The great part is you're you're providing uh an architecture for a business to address this issue, right? And there's these jobs that everybody can have to have an effect on it. The thing that I want to know is like, let's go deep into like a manager's mind. Because turnover uh being measured is one thing, but people actually having a change in how they're leading and managing is sort of the where the rubber meets the road.

SPEAKER_01 14:17

Right.

Chris Allen 14:17

So let's let's talk about, you know, give us kind of an example uh of managers that change the way that they're doing things to drive a different outcome to get people to stick around.

SPEAKER_01 14:27

It's a great question, Chris, because when I think back to the first time I did this at the bank, all we knew was we said, you have a goal, we're gonna measure it every month, make your goal. So I can only assume that managers came out of their offices, they brought pizza in on Friday, they said, How was Johnny's little Johnny's Lidley game last night? They just became more human. This is before I wrote the book about stay interviews. So this is just accountability. I got to make this goal, what am I gonna do? But if they think they don't have to make the goal, they're not going to change. Yeah. And then when they were told nine months later, you don't have to make the school anymore, they didn't change.

Chris Allen 15:10

I think one of the biggest things is creating lasting change. You do you do have to measure it. Uh, but one of the things that I I do think is that is important is there's a there is a uh I I love when when leaders are trying to help businesses, you know, the whole person comes to work. You know what I mean? It isn't just, you know, there isn't my work self and you know, my home self. And for uh leaders to to sort of charge managers and team members to show up and become the best version of themselves and have an opportunity to do that. You're providing uh the architecture to do that. What are some from a psychologist standpoint uh is something that you you think that could help uh a manager sort of become the best version of themselves while doing it at work?

SPEAKER_01 15:57

You know, the stay interviews have five prescribed questions. They're carefully researched. We train people exactly how to ask them. And so I'll tell you the five questions, which have some big surprises in them. The first question is when you travel to work each day, what things do you look forward to? Now that sounds like a simple question. It's not simple in this regard. We want the brain to get into day-to-day work and we want to begin being positive. The interesting thing, this gets back to the therapist part, is we all have bra have the brains of a cave person. We our brains tell us we're stepping out of a cave in the morning, don't get eaten by a lion. So if the question was, what things don't you look forward to each day? We know that one. What things you look forward to, you have to think about. So so we start as being positive and getting local about day-to-day work. Second question is what are you learning here? Now, this is personal in that people don't expect to be asked about this, they don't expect their manager to care, but the whole purpose is to build trust. So it's the opening of caring, and we train the managers. If you come in with one or two things they could learn or they need to learn, and you can help them learn it, great. But learning doesn't require a course. Everybody on your virtual campus is a teacher. Everybody, you can just arrange for somebody to meet with somebody else across the miles three times to learn something. But if you walk out of the room and you've arranged for them to learn something new, it's a cool thing. I used to say it's low-hanging fruit until a manager said, Dick the fruits on the ground. You just have to do it once. You get into the habit one time. Third question is my favorite, which is why do you stay here? It's my favorite because, first of all, it's a positive question. If the question was, why are you going to leave? Why do you stay here? The normal answer is because I have to pay the bills, because they don't know the answer. And so we train managers to say, you could probably leave here and pay the bills easier, and I'm grateful that you don't. But really, why is it you stay? And then the manager's job is to shut your mouth. Do not give in to silence, because they really have to think about it. And we want them to discover why they stay, announce it out loud so their own voice hears it. And we want them to be clear on that discovery before we go to question four, which is when's the last time you thought about leaving, and what prompted it? And question five is what can I do as your manager to make work better for you? If we can get them, Chris, to take a page and a half of notes, scribbled notes, whatever it is, but really probe. The key skill is to convert five questions to 25 questions. Take the popcorn trail. If they say, Well, I look forward to coming to work to be with my friends, cool. Who are your friends? What makes them your friends? What do they have in common? Who do you who do you work with who's not your friend? Tell it is tell me more, tell me more, tell me. It's the therapist's part. Tell me more, tell me more, tell me more.

Chris Allen 19:13

Be curious.

SPEAKER_01 19:13

Right. And if we can get them to do that, they transform themselves because they become more interested in each individual employee. The most common objection is, well, what if they can't build trust? What if they haven't built trust? And my answer is 85 or 90 percent have. Go for the win. And if somebody can't do this, they can't do it. Stop telling people you care about them if you give them a jerk boss. Get rid of the jerk boss.

Chris Allen 19:44

I I I love this. The having uh five questions to change two people at once and create an environment that's safer than most environments is that's a that's a huge win just in those five questions. So that's brilliant. One of the things that I think that leaders struggle with is something that I love to hear you talk about, which is this idea of I'm managing this whole company or I'm managing this large group. I'm gonna treat them as a group versus where you challenge that. And I would love to hear you tell us a little bit about how you have figured out a way for people to uh lead individuals and manage individuals rather than groups.

SPEAKER_01 20:26

You know, one of my favorite sentences to hear is my managers don't want to know people's names until they know if they're gonna stay. Wow. Chicken or the egg. And it happens more than you would guess. Uh so it's all I think in the training that they really have to have to buy in that it's gonna be awkward sometimes when you do this, but we want you to learn how to be a good listener, we want you to learn how to probe, we want you to take notes, and we want you to not blame other people in the meeting. Surprisingly, if you take those four skills, when we train managers, we say we're gonna teach you four skills, then we want to know which one you think is most important. The most important to me is probing to take five questions and convert them to 20 or 30 questions. The most common one, according to the managers, is don't blame somebody else. So the way we explain it is there's a creek with crocodiles and alligators. The employees on one side holding one end of the rope, you're on the other side holding the other end. They have walked into the creek. You're inviting them to complain, they're gonna complain. Some of them are gonna complain. It's okay. If they complain, you say, tell me more, help me understand, give me an example. But if they say, Come on, Chris, you know what it's like to work here. I see you sometimes. You're really frustrated too. And if you say, Yeah, I be I have bad days here, you just stopped being their boss.

Chris Allen 22:07

Yeah.

SPEAKER_01 22:07

You are no longer their manager. You've given up all your control, all your authority, because now you're you have a special relationship with them. That is the skill to avoid that. That most managers think. It's the most important skill of all, which tells me it happens more than I think it would happen.

Chris Allen 22:25

Yeah, and that's a vulnerability skill that uh that's gonna create connection, right? And if you can cur can connect with individuals, you know, hopefully over time they'll run through a wall and you're working as a team in a meaningful way. Yeah.

SPEAKER_01 22:36

Yeah. And if somebody tries to pull you in, you say, hey, look, it's work. I have a bad hour or two, but I'm all in 10 fingers and 10 toes. Let's get back to you.

Chris Allen 22:46

You got to tell us about the gold mine for four kilometers, Steve, in a gold mine that you wouldn't do again. What was the biggest lesson you got there?

SPEAKER_01 22:53

I'll tell you this for starters. Two years ago, when the submersible blew up going to the Titanic, there was so much reporting about it, and 60 Minutes ran a report, and they said the only thing deeper than the Titanic is the imponing gold mine in South Africa. That's where I was. I uh there was an article about me in what used to be called Training and Development magazine. Anglo Gold is shot, it has since merged with another company, it's the biggest gold mining company in the world. They saw that article and reached out to me and said, we can't keep gold mine working. So I went to, I actually went to Africa twice. The first time I went there, I landed in Johannesburg. Security is everywhere. So it was treating me better than most people. Town car waiting, took me to a hotel behind a fence and got there, took a shower, and I had dinner with the executives of this company who I talked to on the phone, but I'd never met in person. So we sat down, we shook hands, ordered a bottle of wine, had a toast, and the one said in his Afrikan accent, as you know, tomorrow morning at 5 30, we will pick you up for the two-hour drive so you can go to the uh the Tautona mine. Unfortunately, today we had a seismic event and five of our workers were killed. So we're thinking it's better if you go to the imponing mine. Do you agree? Well, I was knocking down a line. Yeah, yeah, you're like, sure. So so the next morning uh we went four kilometers deep in an incredible elevator that is not only fast, but they pack it to everybody they possibly can. And above like the chair rail level, there is nothing. There's nothing. So if you touch the rocks, you injure yourself. You are flying down. And I was down there for four hours. You hear the constant sound of air blowing because they have to constantly pump in oxygen and blow air out. Uh, we toured and then we began to crawl to where the only thing, only way you could see was the light on your helmet. And I actually watched people digging and mining. And then they said, We're going to start dynamiting. Would you like to see that? I said, No.

unknown 25:23

I don't want to see that.

SPEAKER_01 25:26

It was crazy. Never do it again.

Chris Allen 25:28

You know, I it's it's like I would imagine the conditions were the reason that there was turnover there. Uh maybe not the managers, but maybe the conditions.

SPEAKER_01 25:36

You know, they imported other workers from all around Africa. They stayed in dormitories, they would come just to make money to send back to their families. But I I know a big part of it was they missed their families. And but we did stay interviews. We did everything in Turnover fell.

Chris Allen 25:54

That's amazing. Well, you know, as uh let's say, you know, founders, there's a there's a lot of founders that listen to the podcast. What are some of the things that that you would say to get them to start thinking about the sort of turnover? Maybe it's not an emergency yet, but what do you think some of the things that they could take away from really activating the playbook that you're talking about?

SPEAKER_01 26:15

The biggest sentence of all, Chris, is the number one reason employees stay or leave or engage or disengage is how much they trust their boss. And for us, everything happens on that level. And if we can identify a company policy or process we have to address, we do. But we know that here's the example I always use. Instead of surveying employees, put a microphone under their dinner table, and you'll learn everything you want to know. And when when the joke line is when employees are having dinner and somebody says, How was your day, dear? Nobody says, Oh, my my day was okay. I I just wish we had pet insurance. Because nobody cares. Nobody joins for pet insurance, nobody stays for pet insurance, nobody works harder and gives more engaged because, oh gosh, we have pet insurance.

Chris Allen 27:06

So we're not just picking on the pet insurance people, though.

SPEAKER_01 27:09

Not to pick up, they're wonderful people, but we've been kind of led into all these things matter. What matters is the manager relationship. And so uh so I learned that from all the work this professor helped me to learn. And we have a saying in our company, our small company, which is when we're talking strategy, one of us will inevitably say, What's the one pin? Which means in bowling, and I don't bowl, but in bowling, you can only get a strike if you hit the one pin. You can't hit the seven pin. So so we're always thinking, what's the one pin? The one pin is managers. I'll give you, I'll give you a contrarian example, and I put a slide up yesterday to tell the story. Gallup has been measuring employee engagement in the United States since 2000. So we have 26 years of data. The 26 years of data says for 10 years it didn't change, then it got a little better, then it got a little worse, then we had a pandemic, now it's a lot worse. But over the course of 26 years, it hasn't improved. And Gallup was asked, why hasn't what is happening? These companies, 70 percent of companies do these surveys, not necessarily Gallup's, they spend millions of dollars. Why is it engagement hasn't improved? Gallup wrote a paper and they said there's three reasons it hasn't improved. They said jobs are not clear, managers are not skilled, and people are tired of surveys. I would say, well, you know what? When's the last time a manager got fired for a low engagement score? Because engagement surveys just create more one-size-fits-all programs. You want better communication? We got it. Town hall meetings, better newsletters. Nobody cares. Nobody, what people want is their manager to tell them what's going on, for their manager to tell them they did a good job. When those people are having dinner, they're talking about bosses, colleagues, and duties. And I was tested on this uh some time ago. I was in Southern California with the top 25 executives of a pharmaceutical company. And homes are expensive in Southern California. These people live in big homes. These are the top 25 people. And I was explaining that if you put a microphone under the under the table, theoretically you're going to hear all this. And one gentleman was enraged. He stood up to say to me, I so disagree with you. Work-life balance. I tell my people, you don't talk about work at home, you don't talk about work over there, you be with your family. My employees are with their families. And I thought about saying, you're a brilliant sit down, you know, something, you know. Like, we're pretty good. So what I did instead was I said to the top 25, I said, let me ask you to be honest. I'm going to ask you a question, raise your arm if it's true. Raise your arm if in the last week you've talked about your manager over dinner. 25 arms in the air. So we tell managers, you're on the menu every night. You're on the menu. Maybe not every night, maybe it's every other night, but you decide what they're going to say about you. But they're not talking about their pay over dinner. They're not talking about pet insurance. They're not talking about anything but you and their colleagues and their day-to-day work. That's where retention is.

Chris Allen 30:34

That's that's an amazing correlation and very astute. And one of the things that I think would be awesome is if you were to tell entrepreneurs or any of us that are that are leading teams, what is the one thing we should get up and walk out and go do in the next seven days to start to address this issue? What's the one thing that we can wake up and do?

SPEAKER_01 30:57

Do a stay interview. And or I would say an equivalent, but get to know who they are and do it in such a way that you have a you have a meeting where you say, I want to have a meeting with you to learn what I can do to make work here better for you. I used to jokingly say there's only two kinds of meetings. Did you do your work and here's more work? This is a different kind of meeting. And it is only about what can I do to make work here better for you? And they will go home and over dinner that night, they will talk about you, but in a much better way.

Chris Allen 31:30

Well, everybody, I just want to say Dick Finnegan just brought the house down. So let's give him a round of applause. Thanks so much, Jake.

Narrator 31:39

Thank you for listening to the Entrepreneur Studio Podcast. Check the show notes for resources and links from today's episode, and follow us on Instagram at the Entrepreneur Snut Studio. See you next time.