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The Secret to Solving Employee Turnover and Its Bottom-Line Drain

Turn Over | Human Capital | Fahrenheit Advisors

Employee turnover is a significant burden on your business, impacting productivity, performance, and, most importantly, your bottom line. With turnover rates expected to continue increasing in 2022, it may be the single biggest predictable and solvable challenge for your business this year.

Although you can’t completely eliminate turnover, you can take control to minimize it — and its financial repercussions on your business. Estimates of the hard costs to replace an employee vary, ranging from one-third to as much as double an employee’s annual salary, depending on their role. So for an employee making $100,000, be prepared to spend $33,000 to as much as $200,000 to replace that employee. The takeaway is this: From advertising to training, turnover costs add up quickly. And that doesn’t even count related costs like knowledge loss, reduced morale, or the toll a vacant position can take on remaining employees.

The secret to solving employee turnover and its bottom-line drain is a coaching culture.

Today’s employees don’t want just salary, perks, or flexibility. They seek more. They seek personal development. They seek growth. They seek an employer who values their contributions and invests in their future.

Harvard Business Review recently declared “The Great Resignation” is instead “The Great Exploration,” in which employees are experiencing a personal awakening that’s reshaping how they work and think about their futures, fueling an awareness of the need to stay skilled and relevant — and creating a desire for an employer that supports their growth.

That’s where a coaching culture makes the difference. A coaching culture is not merely checking the box on setting up a few coaching sessions for the C-suite. It’s initiating a deliberate shift in developing executives, managers, and employees as part of a long-term commitment to their futures. A coaching culture is laser-focused on growing and nurturing talent in order to strengthen leadership capacities and deepen engagement — all with the goal of delivering key results for the employee and, ultimately, the business as well.

To stop the churn of employee turnover, it’s time for businesses to think outside the box to hold onto employees as well as attract new ones — and then retain the new-hires they fought so hard to bring onboard.


Boredom is the death knell for employee satisfaction. High performers want to work in environments where they can develop new skills, feel challenged, and achieve more. In addition, they need consistent, meaningful, and personalized feedback on their performance. And despite the fact that money is frequently tied to satisfaction, employees are more interested in knowing their work has meaning and purpose.

Employees want to make a meaningful contribution to the business, not just be utilized for their productivity. A coaching culture sends a clear message: You are valuable and valued.

Additionally, it’s said people don’t quit companies, they quit managers. It’s true! Up to 60 percent of employees say they report to managers who are not good coaches and, as a result, they’re thinking of quitting. To prevent such resignations, it’s necessary to make sure their managers are the effective coaches employees need, want, and deserve.

A coaching culture is an environment grounded in a growth mindset that leverages coaching practices to empower managers to encourage, support, and engage employees — an integral piece of the employee satisfaction puzzle. It moves employees beyond the traditional bi-annual performance review to the proactive approach of year-round development via one-on-one coaching that fosters discovery, feedback, reflection, and progress.

To help employees do their jobs better, many businesses invest in enablement strategies, training, and mentorship programs. And yet they still don’t see long-term results. Why? Because they lack coaching — which is the spark that ignites sustainable change. Coaching is the difference-maker.

Specifically, a coaching culture establishes a consistent, measurable framework that involves behaviors like:

  • individualized professional development
  • mutual goal-setting
  • task prioritization
  • providing consistent feedback on strengths and opportunities
  • clarifying short- and long-term goals

No matter your environment, a coaching culture positively impacts employees in all settings, including office-based, remote, and hybrid situations.


A coaching culture not only boosts employee retention and reduces employee turnover by increasing employee engagement and sense of value, it’s also an effective tool to attract new talent who seek an employer committed to their future. At its core, a coaching culture sparks innovation, encourages and supports growth, and increases productivity — all of which lead to better performance and higher revenues.

In short, a coaching culture reduces employee turnover and related costs while driving bottom-line growth. It’s a win-win.

Want proof? A Metrix Global LLC study of business owners and executives reported these results from their coaching cultures:

  • 61 percent said it increased job satisfaction
  • 53 percent said it increased productivity
  • 67 percent said it improved teamwork
  • 22 percent said it increased profitability

If your business could increase profitability while also boosting job satisfaction, productivity, and teamwork among employees, why wouldn’t you?



Is your business ready for a coaching culture? Let’s look at 6 key questions:

  1. Is employee satisfaction lower than you want it to be?
  2. Do employees report they don’t feel supported by their managers?
  3. Is low employee retention affecting morale, performance, productivity, and your bottom line?
  4. Does your leadership team place high value on its people?
  5. Do the values of your company align with a growth mindset?
  6. Do your KPIs measure people-based performance, goals, and attitudes?

If you answered YES to 3 or more questions, your business is ready for a coaching culture. If you didn’t, you still can create a coaching culture — you just have a little more work to do to get ready.

To build a coaching culture, start with a baseline assessment to identify your current culture and its fit with a coaching culture, looking at things like job descriptions, performance reviews, training, and mentoring programs. Create metrics to measure their effectiveness. So, for example, how do you currently score for mentoring?

Next, create metrics around critical coaching culture attitudes and beliefs, such as whether managers feel supported in their roles, and to what degree employees believe they have the opportunity to grow. Ask your employees what they think — and what they need. Communication and transparency are key to successfully enrolling all employees to embrace the vision of a coaching culture.

Once the metrics are in hand and you know where you are, you can plot a course to move ahead toward creating the strong coaching culture you envision and customizing it to best serve the specific needs and characteristics of your employees and your business. Of course, with ongoing attention to metrics, you can continue to measure your progress and successes, and the sustainability of your efforts.

Some tips for building a successful coaching culture:

  • Explain why you’re making a shift to a coaching culture, and how it will benefit employees as well as the business
  • Assess employee and company values to guide decision making
  • Create policies that specifically reward coaching
  • Develop internal controls
  • Include all managers — don’t start with “some”
  • Hold leaders accountable

Your employees are your business’s most important asset —today that’s truer than ever. Holding onto your employees is critical, and the secret to solving employee turnover and its bottom-line drain is a commitment to establishing a coaching culture that promises your business is a place where employees can contribute, grow, and thrive.

Leadership and executive coaches from Fahrenheit can help you build a coaching culture that strengthens employee engagement and positively impacts your bottom line. Contact us today.


About the Author

Rachel Lutowsky is member of Fahrenheit’s Leadership Team and is responsible for developing the firm’s leadership coaching practice nationwide. The practice’s talented team of certified coaches and trainers support businesses of all sizes across every industry. Based in Phoenix, Rachel also oversees growth of the firm’s other service lines there, including Business Advisory, Finance & Accounting, Human Capital, Sales Advisory, and Executive Search & Recruiting.