The ZIZO Effect

Ep 3 Engage or Exit: Understanding Employee Turnover

• ZIZO Technologies Inc. • Season 1 • Episode 3

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In this episode of the ZIZO Effect podcast, hosts Andrew and Jimmy delve into the critical issue of employee turnover and engagement. As they unpack the causes and consequences of staff changes, they shed light on the modern workforce's challenges, including the impact of rising wages, the gig economy, and generational differences. With staggering costs and implications for businesses, they emphasize the urgent need for solutions. Tune in for insights into the true cost of attrition and a glimpse into the future of workforce management.

Andrew Reimers:

Welcome to the ZIZO Effect podcast, where we talk about all things gamified. In this episode, we're stepping away from the leaderboards to address some more pressing issues: employee turnover and engagement. What are they? Why do they matter? We'll unpack these concepts, digging into the causes and the consequences of staff changes and why understanding this cycle is crucial for every organization. So ready your minds as we unpack the challenges of engagement and the impact of attrition. Get ready, it's game time. Hello, hello. Welcome back to another episode of the ZIZO Effect podcast. I am your host, Andrew J Reimers, and I was my high school senior class president.

Jimmy Chebat:

Nice, I did not know that about you.

Andrew Reimers:

With me, as always, our in-house gamification expert and co-host, Mr Jimmy Chebat.

Jimmy Chebat:

Well, I don't know if I ever told you but I was Scrooge in my sixth grade play a Christmas Carol, Wow.

Andrew Reimers:

Played the lead role. Wow, and it's funny how life imitates art. No, jimmy, thank you for joining me again. It's always a pleasure to sit down and talk with you and discuss all things, gamified as we say. Hopefully by now our listeners are privy to how we like to start our shows. Yeah, and that is, with a little segment we like to call.

Jimmy Chebat:

Name the game.

Andrew Reimers:

Now, as a quick recap, our wonderful producers behind the scene, alex and Emma, are going to play a song from a video game Round one. It's up to us. We're challenging each other. You're currently in the lead with a record of one, oh and one. I am sitting at 0, oh, oh, one and one, excuse me, and we'll see who comes out on top this week.

Jimmy Chebat:

But then hold on, hold on. Let's make sure that we get, because we don't have a buzzer yet. We don't have to get a buzzer, just yell it out, you got it, name it. We obviously don't know the name of the song or the name of the game, but, yes, after we get a chance to compete, we give our audience a chance to compete where we play a second song where they have to name the game. We might provide a few hints. Yeah, we've done so in the past couple episodes, so I don't see us deviating, unless, of course, we don't know the game. So why don't we get started with the first game and then we can let our audience know how they can participate in the second game?

Andrew Reimers:

Sounds good to me Awesome.

Jimmy Chebat:

Emma, I know this One second Mega man I'm gonna. I don't know if it's Mega man, is it Mega man?

Andrew Reimers:

Wow.

Jimmy Chebat:

All right.

Andrew Reimers:

Oh.

Jimmy Chebat:

I was thinking hold on, there's a game I don't know if that's Street Fighter, like a Kung Fu game, and it was 2D and that's what I thought it was. I can't remember the name Double Dragon, no, maybe maybe it was Double Dragon that I was thinking of. But yes, now I did play Mega man. Now they went. They had three of them, right, mega man, one Mega man had like nine, nine I think. I remember I played the first three and they were great. Yeah, they kept on getting better and better as they went and it's iconic. I don't know if I would put it up with Zelda and Super Mario Brothers, but it's a. It's one that I played frequently.

Andrew Reimers:

Wow, you know it's funny about that is I mean I haven't played Mega man. I have an NES classic, I have a Switch, I have all that. I haven't played Mega man since I was a kid and it's. It's incredible the way that brings back these memories and I can actually remember a friend of mine, dan M, that I play. He owned Mega man. I never owned it and he played and I used to want to go to hang, you know, hang out with him. Pretty much the only reason was to play Mega man. Yeah.

Jimmy Chebat:

You know, I don't know if we had talked about this on previous episodes, but we I know that you and I had talked about it. You know going to somebody's house to play games. My son is turning 17. I'll tell a quick story before I get back to this other story about playing together. But I gave him his first controller to play when he was two. It wasn't on. I had it turned off because I wanted to play and I didn't want him to distract me from playing. But he felt he was playing along with me. And when he was like around three, right after about a year playing, we were playing Lego Batman. I remember the game. I said you know what? Let me just turn it on. He's going to have to learn at some point. So I turned on his controller. He knew how to play. He was playing right alongside with me like he was playing the whole time. I was blown away. That is so cool. But anyways, fast forward. That was 14 years ago.

Jimmy Chebat:

He's about to turn 17. He's he's an avid gamer. I get a lot of inspiration from him and I get a lot of feedback about how to build ZIZO through modern game mechanics. But he plays with his friends all the time. Nobody ever comes over. They play online. And for us I remember, like you said, one of the friends, if you were in a tight group circle, you wouldn't all buy the same game. You would buy different games, trade games and go over to each other's houses if you wanted to play together. Yeah, and to me there's. I mean, I love modern networking and the ability to play with anybody at any time, but it's just taken away from that fun atmosphere. There's no more sleepovers.

Jimmy Chebat:

My daughter has a ton but my son, they're always online.

Andrew Reimers:

Yeah, I got smoked by an eight-year-old in in virtual bowling and the Oculus the other in the other day, but I digress. Did they talk? Did he talk?

Jimmy Chebat:

crap.

Andrew Reimers:

Oh, yeah, yeah we were talking the whole time. It was pretty funny, Alright we got another.

Jimmy Chebat:

We got another song to name the games. Yeah.

Andrew Reimers:

So this is uh, this is the audience's chance to participate and to win a fabulous prize, and our first batch of prizes. We have this wonderful, limited edition, wonderfully crafted ZIZO hat with beautiful design. It's game time all on the inside. All you need to do is join us at play ZIZO on Instagram, LinkedIn, TikTok, YouTube, wherever you get your podcasts, whether it's Apple Podcast, Spotify comment your answer and we will choose a winner and send out the hat right away.

Jimmy Chebat:

Don't forget our website at wwwplayzizo. com. playzizo.

Andrew Reimers:

Maybe that'll be my gimmick for getting the website. Yeah, you're always missing it, that's okay, I forgive you.

Jimmy Chebat:

Let's move forward. Emma, alex, go ahead with the second song.

Andrew Reimers:

I got it.

Jimmy Chebat:

This one. It took me a while. I mean, we're giving clues.

Andrew Reimers:

Yeah, yeah, please.

Jimmy Chebat:

Well, I mean, this one's a personal experience I didn't have, because this was exclusive to one of the gaming systems. Yeah, so I didn't have that gaming system, so I didn't play that game, so it was less familiar to me, but I remember it. Here's a clue recent movie it is. So there's your clue, that's not your way anymore. Remember. Go on comment.

Andrew Reimers:

I don't think it's anywhere in the studio either. No, I don't see it. Okay, all right, so chime in on social media, let us know your answer and we will choose a winner from there. But, jimmy, this is a gamification podcast and we're here to talk about gamification in all the ways that it works in our lives. However, there's a very big problem happening in the modern workforce and I think it's important that we get into this. Before we talk solutions, it's important that we understand the problem. I'm going to ask you flat out what is attrition? Because I'm going to let you know that my only experience with the word attrition before I started working here was in pro wrestling and two big, sweaty guys would be slapping the meat out of each other and the commentators would talk about how it's a war of attrition, and I didn't really know what it meant I knew. It sounded pretty cool, but why don't you tell me, when it comes to work with the modern workforce, what is attrition? That's pretty funny.

Jimmy Chebat:

I've heard that term before as well. I've never connected the two either the war of attrition. But attrition is essentially turnover. Somebody leaves, they quit or they get fired. It's employee turnover. That's a simple answer for what is attrition.

Andrew Reimers:

Ok, I think a lot of people would just come back and say, well, yeah, that's just the cost of doing business.

Jimmy Chebat:

Yeah sure I mean. Normally you would think so, but we have a problem in today's day and age where that number is skyrocketed.

Andrew Reimers:

Yeah, I mean, everything that I've seen is really remarkable that anyone even has jobs. But do you think it's fair or would it be uncalled for to maybe ask this question? You can tell me if you don't really have an answer to it. But who is quitting? Yeah, who is leaving their jobs, for whatever the reasons might be? Is it a general part of the modern workforce? Is it not just people retiring? That's not attrition or anything like that. Who is quitting?

Jimmy Chebat:

Yeah, it's a good question, it's a valid question and, if you recall, during the pandemic there was terms thrown out there the great resignation. More recently, the quiet quit, the war for labor, the war for talent, I think was the exact language, but for a short period of time it impacted almost everybody, every industry, but it primarily is impacting on a higher level, frontline workers, younger generation jobs, more so than careers. You're not looking at specialized workers. We're talking about attorneys, accountants, high level skilled workers. They're not quitting left and right, but for frontline workers we're talking about maybe, fast food, retail, call centers. We're seeing spikes that have never been seen before in history of the workforce.

Andrew Reimers:

Well, it makes sense, a global pandemic will cause things to change, and that I think it's important then to understand the primary reasons why people are now quitting their jobs. So we've already talked about the workforce. No, not enough, not enough, not enough, no. So what do you think we should do? Should we define the workforce?

Jimmy Chebat:

Oh, define the workforce? Yeah, I think we should. I think when you look at the modern workforce, I remember I'm just gonna take you back, tell you a little story Back in 2018, I was at an industry conference and I had designed a system that's the original iteration of ZIZO. Brought it back to market in 2012. We're not gonna jump into that, but it was something that was more about performance management and accountability management, just transparency into access, into information. But we're at a conference and everybody was talking about the same thing these numbers are going up, what is going on? And at that point, this was pre-pandemic, so it wasn't directly related to the pandemic, but it was a new workforce, right? So when you look at generationally, you know I'm part of Gen X millennials came after us.

Jimmy Chebat:

Everybody used to complain about the millennials. They're so disengaged. Gen Z is different. Gen Z is they had just started entering the workforce. It's the youngest generation and they are very decisive. They're very unique.

Jimmy Chebat:

They're the first generation that grew up with technology in their hands. So I don't know if you recall, we talked on one of the previous episodes. You know we put technology in our kids' hands. This is the first generation that, literally, you know they had iPads and iPhones as their form of entertainment, their first forms of entertainment, watching YouTube videos and such. It really works in potty training too. It works in so many different ways. I mean, look, I'm not exempt from this. I'm one of the early parents who was like hey, here, you know, we're at a restaurant, watch this video or play this game. But that comes. There's collateral damage with that. They're super distracted, their minds are conditioned with technology and there's something called TikTok brain where people need something different Every 30 seconds or 10 seconds, 15 seconds. They get bored. That condition can do like they can't even watch full feature films because they need something new and that scrolling. So that's one of the primary reasons of the uptick is the new generation. They're just different.

Jimmy Chebat:

Another one is the gig economy. I mean, you're a musician, you've heard the term, but most people don't understand. Well, what is the gig economy? Is it, they're thinking, if it's just an economy, is it just, you know how, is it like inflation? But the gig economy is a way where people work for themselves and they're contract employees and there's a bunch of different organizations, applications, corporations that they can go and work for. So the most familiar is Uber or Lyft right, they can be a driver right, and they're their own business. They have their own car and they go drive whenever they want. They punch in whenever they want, they leave whenever they want. They can make as much money as they want or as little money as they want, however much they want to work.

Jimmy Chebat:

But it's not just that. It's things like Instacart you know where they can go shopping for people, doordash, deliver fast food, even things like Airbnb and Turro, which you can go buy houses and rent them out, or buy cars and rent them out to people, and so they're building their own businesses. And then Upwork or Fiverr, where they can go online if they have a special talent. So it's not limited to just those kind of frontline tasks and jobs. But if you're a graphic designer, if you're an accountant, if you're a data entry person, if you're a programmer, you can go on there and just get gigs right Jobs, bid on jobs, bid on projects and work anytime you want.

Andrew Reimers:

Yeah, you know. Another example that comes to mind and it cracks me up to think about it because I saw this happen almost in real time. But I think another contributor for employee turnover is rising wages. And the reason I laugh is because there's this area I won't say specifically where it is, you know we're in the Buffalo New York area, but there anyway there's a burger can across the street from McDonald's and I watched them. Now hiring, now hiring. Now hiring $15 an hour, now hiring $15. 50 an hour, now hiring $16 an hour, now hiring $1650, rising wages.

Andrew Reimers:

You talk about frontline workers and people who are doing these jobs. Maybe they aren't career positions, but they're paying the bills for now. It's getting by. They might be younger, they might be part time, whatever it is, but now there are so many opportunities to just make more money elsewhere that it's easy to quit because they're not invested in what they're doing. You mentioned disengagement. You know they don't care about the company they work for, they don't care about what their role is in contributing and helping that company succeed. All they're thinking about is themselves. And I'm not saying that's necessarily wrong, but it's just the way the current world is. There's a lot of other opportunities out there for people to be able to. It's a lot easier to quit a job now and get another job than maybe it was for my father or my grandfather back in the day.

Jimmy Chebat:

Yeah, and you're partly right, partly wrong. I think people want to think like compensation is the only reason why people take a job or why they would quit a job, but it's usually the secondary reason. If they don't feel like they have a sense of purpose or sense of belonging or they've gotten some sort of enjoyment, some sort of intrinsic motivation, then they will leave and they would look for something with bigger, better. They would be more attracted to that sign that's on Burger King that says 15, 15 hour and, yes, rising wages. So those companies McDonald's, burger King, other fast food restaurants, big big box stores they would normally pay minimum wage. They used to pay minimum wage, and minimum wage was never intended to be a living wage. Minimum wage was for jobs people in high school kids in high school kids while they're going to college, they can make some money on the side. These are jobs that don't take a tremendous amount of talent or experience which you can pay, and really what's happened is there's a push to increase minimum wage because people are feeling like it's not a livable wage. Again, never intended.

Jimmy Chebat:

Completely different podcast. We won't jump into that, but I do recall when in that 2018 and we are in New York state. You mentioned Buffalo. We're in New York state. Minimum wage started to jump. I remember I mean the lowest I remember it being for me was $3.50, maybe in 15 cents, really yeah. And when it jumped it would jump by like 10 cents.

Andrew Reimers:

I remember when it jumped my first job sorry to cut you off my first job I was hired for $5.15 an hour and then there was a state mandated increase. It went up to $5.25 an hour. How excited were you. Oh, it was great. I was looking at new cars.

Jimmy Chebat:

You never got any sort of economic training and an extra $0.10 an hour is not going to get you a car, but in any case. Yes, I mean minimum wage is based state by state. The federally mandated minimum wage in the United States is $7.25. But in New York state, I believe, it's somewhere around $15. In California it's $15.50, $13.25 in Arizona and some cities even have higher rates. I think DC is at $17.00. Denver, colorado, is at $17.29. Yeah, I think DC might be $17.00 as well. Seven states have a minimum wage of $15 or more.

Jimmy Chebat:

And again, totally different podcasts, totally different conversation. But what that does is it kills small businesses. Small businesses can't compete and it's a contributor to inflation. And again, the big winners are the big companies who can absorb that initial rush and as the competition goes away, they just raise their costs and again that's where inflation comes in. But you're right, it is a huge contributor to attrition because now they can quit what used to be considered a comfortable office job making $12.50, $13.15 an hour, maybe even with some compensation bonus compensation for it in certain goals and just go to Target and make $24 an hour as an associate, no experience necessary. So it's definitely a huge contributor to attrition.

Jimmy Chebat:

One other one disengagement, and that can be tied to technology that can be tied to the younger generation, but nobody's exempted as human behavior. If you don't like your job, if it's mundane, it's repetitive, you're going to quit. You're going to be disengaged. Millennials I remember this was a huge topic of conversation when millennials entered the workforce Disengagement they wouldn't quit, they would just stay at work. And it's what's now considered the quiet quit, where you're collecting a paycheck, you're just really not doing any work, you're not productive and actually disengagement is costing companies globally in the trillions. I believe it's $7.8 trillion in reduced productivity because of disengagement.

Andrew Reimers:

I'm glad you brought that up because that actually transitions perfect into the next topic that I wanted to mention, because you know their employee turnover in attrition is, of course, a huge problem. I had no idea that it was in the trillions of dollars.

Jimmy Chebat:

And I want to correct myself it's $8.8 trillion, $8.8 trillion, $8.8 trillion for disengagement. That's not attrition. Oh, that's not even attrition, that's just disengagement.

Andrew Reimers:

So we're talking? Oh wow. Well then why don't we talk about? So there's an impact. Now people are leaving jobs. I'm sure you're used to this. You go somewhere, they're understaffed, they're understaffed, they're understaffed, they're understaffed. Why don't you tell me a little bit about the impact that we're seeing on businesses because of this attrition and disengagement problem?

Jimmy Chebat:

Sure, I mean we just mentioned disengagement, what that does to businesses globally and you can that one's very difficult to directly measure and the impact is kind of they painted a broad stroke. There's a Gallup study that, an article that came out that proposed that study. We can put that in our notes here if people want to go read it. But the impact is pretty substantial financially. When you're looking at attrition so you had mentioned earlier, well, isn't that the cost of doing business? Right, attrition, people quit, People move on, especially in front-line workers. These are normally jobs.

Jimmy Chebat:

In the past you know, uh, high attrition rates were considered 30%, 40%, 50% was really pushing it. Some industries you would just have traditionally high attrition. We talked about again with frontline workers. Um, those are usually jobs that people kind of go through and cycle in when they're younger and then they go on and move on to their careers. Um, but there's a direct relationship to costs for businesses and I've seen, I've heard in some one of our prospects dealing with 20% attrition per month. Per month that's over 240%. That is 240%. I don't know exactly what their numbers are, but 240% annual. So if you have a staff and they were a big company, we're talking thousands of agents. If you have a staff of 100 people, you're hiring 240 people every year, training them, onboarding them, training them, paying them. There's no benefit additional benefits to the company. Actually, there's some intangible costs to that. That even cost your company more than the hiring costs.

Andrew Reimers:

Yeah, I mean that's. Uh, I mean turning over your, your staff, twice over in a year.

Jimmy Chebat:

I mean that's no joke, that's big. No, that's huge. That's not the norm, but that is an extreme instance that I that I present, that it was presented to me, but I've heard consistently that attrition is over 100%.

Andrew Reimers:

Yeah, that is really insane to hear. I can only imagine what it does, because there are there's ripple effects. Sure, you know, obviously these businesses are struggling and it's costing them X amount of money per new employee they have to hire, and you know, I think I've heard, you know what is it. You have to hire 100 people to get 50 to show up to training, to get 25 to complete the training, to get 12 to show up on their first day and then three to last the first week, or whatever it might be.

Andrew Reimers:

Yeah, um, you know, and that's a consistent story that I've heard.

Andrew Reimers:

And while all this is happening and you're training and you're trying to, you don't have qualified workers doing the job. So things like customer service, productivity, all of those things decrease as well and the ripple effect is felt so far beyond just what's going on internally with that business, but it's felt by its customers, and I know that that holds a special place with me because I take pride in the fact that, like, our customer service is kind of the best. Yeah and uh, you know he said humbly, no, it's true, you know and ultimately, what it can do to damage a reputation of a business, yeah, those are some of the indirect costs, right?

Jimmy Chebat:

So you mentioned those. So damage to the reputation, uh, which can can can be a domino effect to loss of customers and cause loss of loyalty. But I want to go back for a second with the to the direct cost. Okay, cause you know people measure this and and I've heard red articles, have done a ton of research on the cost of attrition and I've seen numbers as low as 4,500. We're talking about, in the United States, uh, $4,500 per new hire. I've also heard numbers as high as set 60% of an annual salary, things that can go as high as 30, 40,000 per new hire. I can't tell you what the exact cost is. It's going to vary from industry to industry, company to company and of course they're hiring practices. But I will share with you how you can measure your cost of attrition and I can also share with you how to measure attrition, because that those are two very important things to actually know what, because nobody has this as a line item. When you're doing your annual budget, nobody's saying, hey, how much are we spending this year on attrition? They don't put that aside. It is, like you said, kind of a cost of doing business, but how many people are measuring what that actual cost is? And it's skyrocketed. So maybe we could start with the cost of a new hire. Right, and this is something that people ask me frequently, or when I ask them they don't quite know it, right? So I try to kind of lead them down this path.

Jimmy Chebat:

But number one is your recruiting cost. You know what are you spending to recruit People. You know a lot. You can use headhunters, which are very expensive. If anybody's ever used that headhunter, it's about 20%. I've seen rates as high as 30%. You know of the annual salary of the person that you're recruiting. I'm in the wrong business. Yeah, it's, it's high. I mean, they do have some guarantees that you're they're gonna last more than 90 days and they can take some of that work off your plate. So there's some benefits there. But it's very expensive and, depending on you know the size of your workforce and how much you're hiring, I mean it's probably not the right thing to do. So you know, posting on LinkedIn workable or indeed there's a cost to that.

Jimmy Chebat:

You know, once you've gotten people to actually respond to your ad and fill out an application or submit their resumes and you have interviewing right, how many people are doing interviews you know nowadays with, when you're hiring for a remote workforce, a lot of the interview process is done online. So you've got tools that you have to invest in to help you manage those interviews. Those cost money. So what is your tech stack that you're using to help you manage this interview process? And sometimes it's not a single person that makes a decision. There's usually layers there's a first interview, a second, a third and so on, so forth. Reference checks, background checks those cost money to try to make sure that they Fall within your acceptable range. And you know do they have a criminal record? Do they have financial you know a low credit score? When you're dealing with financial institutions, they look at those types sort of things and those cost money.

Jimmy Chebat:

Then, once you've decided to hire them, there's a cost to hiring. Right, you have to onboard them. You have to do all of the paperwork. You know get them on your payroll. You have to any of the the your tools and your systems that you need to put them on your telephone system, put them on your you know whether it's office or Google. You know that cost money.

Jimmy Chebat:

All your other tech stacks that you know they have to use the technologies, the software at platforms and that they have to use to do their jobs. You need to enter them into the, into those systems and you're paying for those licenses as well. Then you have training right. So you can't just hire them and put them on the floor. You have to put them through a training program. You know, I've seen as little as one to two-day training programs, but most are at least a week. Some if you're in regulated industries Like the financial sector You're talking about in some, some instances I've seen two months of training. You're not just paying them, you know, while they're in training, you're paying the trainers, you know, and the indirect cost is, instead of those, training that training department Working with you know, your existing workforce, your existing staff and doing advanced level trainings and upskilling your current staff. You're constantly being, you know, training new hires.

Andrew Reimers:

That's a really great point. I hadn't even thought of that. No, I mean you, you, you bring up a lot there and obviously that cost is Maybe far more than a lot of people realize. Yeah, do the math. Yeah, it's no, you know it's, it's tough, it's definitely a problem. It's definitely something that You're not the only person to have experienced it. I know a lot of people that are listening right now and tuning in right now, that are running businesses, are probably experiencing the same thing and realizing, oh man, maybe we do need to budget for this, because this problem doesn't seem to be getting any better.

Andrew Reimers:

Yeah and maybe we'll get into some solutions as to where that can help as we close today's episode. You know we've talked about frontline workers, establish what that means, and I think it's important that people understand what we mean when we say frontline workers. Here on the podcast we've identified the causes of attrition and and what attrition really means. It's not just for pro wrestling, it's for everybody. You know there is that new generational workforce, the rising wages, the gig economy and the cost of attrition, which is a lot more than I thought it was going to be. Gotta be honest, jimmy, it's all sounds pretty bleak.

Jimmy Chebat:

Yeah, I mean it's, it's not. This is a unique Challenge that we're all facing here.

Andrew Reimers:

Yeah, and I think we're gonna be tackling a lot of the solutions for these problems in upcoming episodes, but we definitely need a change, sir. As we conclude today's episode, we've navigated through the complexities facing our workforce, from frontline challenges to the economic shifts reshaping our world. Now this may seem daunting, but it's also a call to action, a signal that we're on the cusp of a transformative era in workforce management. Next week, we'll embark on a journey back in time to explore the evolution of workforce management. We'll critically examine traditional management approaches, identify the key factors that suggest a radical transformation is needed and how gamification will change the future. Be ready it's game time.

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Andrew Reimers

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Jimmy Chebat

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