Summary of "Why Your Frontline Employee Turnover Is High" – HBR On Leadership

Podcast Title: HBR On Leadership
Host: Harvard Business Review
Episode Title: Why Your Frontline Employee Turnover Is High
Release Date: April 2, 2025
Guests: Joseph Fuller (Harvard Business School) and Manjari Raman (Co-author)

Introduction: Understanding High Turnover Among Frontline Employees

In this insightful episode of HBR On Leadership, host Kurt Nickish delves into the persistent issue of high turnover rates among frontline, low-wage employees. Contrary to the common executive assumption that higher pay is the primary driver for employee retention, researchers Joseph Fuller and Manjari Raman present compelling evidence that other factors play a more significant role in why these essential workers leave their jobs.

Misconceptions About Employee Turnover

Joseph Fuller begins by addressing the widespread misconception among business leaders that low-wage employees primarily seek higher pay when they decide to leave a job. He explains, “Most employers assume that when a low wage worker quits their job, they're primarily motivated by the ability to make more at a different job. And that is a consideration about 40% of the time. But the dominant consideration... transportation issues” (02:42).

Fuller’s research reveals that nearly two-thirds of low-wage employee departures are influenced by logistical challenges such as transportation, rather than the pursuit of higher wages. This finding underscores the complexity of employee retention beyond mere financial incentives.

Profiling Low-Wage Workers

Manjari Raman provides a comprehensive overview of the low-wage workforce, highlighting that these workers constitute approximately 40-44% of the U.S. workforce. She notes, “These are workers who were at or below the 200% of the poverty threshold... a majority of them were earning below $15, below $10 and even $7 per hour” (04:21). This segment of the workforce is disproportionately composed of women and minorities, challenging the stereotype that low-wage positions are predominantly held by less-educated individuals. Interestingly, the research found that even among workers with four-year college degrees, many remain in low-wage roles.

The Myth of Pay as a Sole Retention Strategy

Contrary to the prevalent belief, Joseph Fuller argues that focusing solely on wage increases is an ineffective short-term solution. He states, “Low wage workers are people who are capable of making great commitments to companies, loyal to companies, want to stay where they're currently working” (08:09). Fuller emphasizes that low-wage workers often aspire to grow within their current organizations, a fact that frequently surprises business leaders who view these employees as transient and mercenary.

Addressing Workers' Broader Challenges

Manjari Raman outlines the multifaceted challenges faced by low-wage workers, including financial insecurity, food insecurity, and homelessness. She observes, “Few companies think about what is happening to the lives of their workers outside the company” (08:33). This broader perspective is essential for developing effective retention strategies that address the real-life circumstances influencing employee turnover.

Employer Attitudes and Their Impact

Joseph Fuller highlights a critical disconnect between executive perceptions and frontline realities. He explains, “Low wage workers are just not being viewed through the lens that they have the potential to invest in building their future in a company if opportunities are provided” (13:41). This entrenched mindset leads to a self-fulfilling prophecy where companies accept high turnover as a norm, thereby perpetuating the cycle of churn and low morale.

Best Practices for Reducing Turnover

The discussion shifts to actionable strategies for improving retention among low-wage workers. Kurt Nickish asks about effective practices, prompting Fuller and Raman to outline key approaches:

1. Mentorship Programs: Establishing mentorship relationships where supervisors provide regular, actionable feedback. Fuller emphasizes the importance of consistent and meaningful interactions, stating, “The feedback's got to be regular... comprehensible and actionable for the listener” (16:08).

2. Career Pathways: Creating clear pathways for advancement within the organization. Raman underscores the need for these pathways to be well-communicated and accessible to all employees.

3. Job Design Improvements: Enhancing job roles to make them more engaging and aligned with employees’ aspirations.

Fuller also points out a significant gap between company policies and their implementation on the ground: “When you ask executives, they believe they implement these policies effectively, but on the shop floor, the execution often falls short” (16:08). Bridging this gap is crucial for the success of any retention strategy.

Success Stories and Practical Examples

Manjari Raman provides examples of companies that have successfully implemented these strategies:

• Disney: Partnered with Valencia Community College in Florida to offer English and management courses to housekeepers, creating pathways to higher-paying, customer-facing positions.

• The Source in Western Michigan: A collaborative initiative where local employers provide access to case officers who assist low-wage workers in accessing essential services, such as avoiding eviction or securing stable housing (21:50).

Joseph Fuller also highlights innovative programs from small and medium-sized enterprises that maintain closer relationships between management and workers, fostering a supportive and understanding work environment.

Strategic Importance of Low-Wage Workers

Raman challenges the notion of battling for low-wage talent, suggesting instead that companies should focus on retaining and nurturing their existing workforce. She argues, “You've already got the talent in your companies. Find a way to retain them, grow them, encourage them” (24:53). This shift from a zero-sum "war for talent" to a more sustainable approach benefits both employees and employers by reducing turnover costs and enhancing productivity.

Fuller adds, “Low wage workers are disproportionately diverse... they already know your company, they already have shown commitment to your company. So rather than go into the spot market for labor, invest in upskilling who you've got” (27:24). Investing in current workers not only improves retention but also addresses diversity, equity, and inclusion (DEI) goals.

Conclusion: Reimagining Employee Retention

The episode concludes with a strong call to action for businesses to reevaluate their approach to managing low-wage workers. By implementing mentorship, creating clear career pathways, and redesigning job roles, companies can significantly reduce turnover rates. The insights shared by Joseph Fuller and Manjari Raman highlight the importance of viewing low-wage workers as valuable assets deserving of investment and support, rather than transient labor.

Joseph Fuller succinctly encapsulates the episode’s message: “If companies want to get a more engaged workforce and escape the war for talent, they need to start engaging the workers where they live and where they are” (24:53).

Key Takeaways

• Beyond Pay: Transportation and personal security are major factors influencing employee turnover.
• Comprehensive Support: Mentorship, career development, and job design are essential for retaining low-wage workers.
• Implementation Gap: Effective policies require consistent implementation at all organizational levels.
• Strategic Investment: Investing in existing low-wage employees yields better economic and social outcomes than perpetuating high turnover rates.
• Diversity and Inclusion: Low-wage workers contribute significantly to DEI efforts and should be recognized as integral to organizational success.

By addressing these areas, businesses can foster a more committed, productive, and stable workforce, ultimately enhancing their competitive edge in the market.