Reviewing the Book Targeting Turnover: Basic Psychology, Effectively Applied

Companies lose millions of dollars to unplanned and avoidable employee turnover. Turnover impacts top- and bottom-line financial results, decreasing profit by disrupting business operations with staffing shortages while increasing costs to recruit, hire, and onboard new employees. Because turnover is expensive and relatively easy to measure, I-O psychologists working in personnel selection, talent development, culture management, employee engagement, health and well-being, and other areas frequently use turnover to justify the financial value of science-based talent practices. Scores of studies have shown that when organizations do things like use hiring selection tests, develop cultural attributes, change compensation methods, or administer development programs, then turnover levels go down (Rubenstein et al., 2018). In these studies, turnover is typically used as an outcome criterion to demonstrate the value of an earlier intervention. But what would an intervention look like if turnover was the starting point, not the outcome? If the entire focus of the intervention was to retain existing employees without increasing workforce costs? This is the approach discussed in the book Targeting Turnover by Richard Finnegan.¹

Finnegan’s book starts with a discussion of turnover trends using publicly available data, showing why risks and costs of turnover are growing due to shifts in the size and composition of the labor force. Much of these data will be familiar to I-O psychologists who keep up with labor market trends and forecasts. The book becomes unique when Finnegan discusses his personal background, helping companies reduce turnover. His interest in reducing turnover started when he was working in a bank as an HR professional in 1993. “[My manager repeated the CEO’s directive to reduce turnover] and informed me I was solely accountable for cutting turnover and must report retention improvements each month” (p. 24). This goal met the criteria of being SMART with one possible exception. It was specific, measurable, relevant, and time bound. But was it achievable given he had to accomplish it without changing job design or making additional investment in employee compensation or development? Solving this challenge led Finnegan to a lifelong career helping companies reduce turnover solely by changing how managers interact with employees.

Finnegan’s Philosophy for Reducing Turnover

The method Finnegan developed for reducing turnover reads like a case study in effectively applying fundamental psychological principles to address a specific organizational challenge. It started when he realized the only definitive resource he had to address turnover was a corporate mandate issued by the bank’s CEO to increase employee retention. He used this to get branch managers to commit to clear, measurable turnover reduction goals. This put the onus on managers to find ways to reduce turnover within their employee population using resources they already had available to them. To ensure the managers’ goals were viewed as achievable, he set them based on reducing relative turnover levels within each branch by 10%. This allowed for variations in turnover levels caused by local labor market conditions outside of the managers’ control. This simple intervention led to a 19% reduction in overall company turnover and significant financial savings for the organization. It also led Finnegan to wonder what else could have been done to further improve these results.

Finnegan’s interest in turnover reduction led him to read research conducted by I-O psychologists studying employee retention, most notably Kevin Murphy, who at the time was a professor at Penn State, Finnegan’s alma mater. Finnegan credits Dr. Murphy’s willingness to share his own turnover research, along with that of other I-O psychologists, as a key step in the development of his methods. He sums up the core findings of this research in a few principles:

The number one reason employees stay or leave is how much they trust their immediate supervisors. This does not mean that each time an employee quits it is because she doesn’t trust her boss, though that might be the reason. It does mean that supervisors are your very best retention solution. (page 42)

This insight led to designing a retention methodology focused on building relationships between managers and direct reports to proactively address retention risks before employees left the company.

What is unique about Finnegan’s method relative to other interventions designed to reduce turnover is that it does not prescribe the use of any one action to retain employees. Instead, it creates the conditions necessary to identify actions to meet the retention needs of each individual employee. This is done through creating conversations where employees feel comfortable surfacing issues with their managers that might lead them to quit their job if they were to go unaddressed.

The “Finnegan’s Arrow” Turnover Reduction Methodology

Finnegan’s experience helping companies reduce turnover led to the development of a retention methodology he refers to as “Finnegan’s Arrow.” This methodology consists of five steps called dollars, goals, stay interviews, forecasts, and accountability.

The first step, dollars, involves leaders from business operations and finance collaboratively calculating the cost of employee turnover for roles across the company. Having these leaders directly involved in calculating turnover costs is critical to gaining their commitment toward the importance of employee retention. This step is rooted in Finnegan’s early experience at the bank. If the bank CEO had not publicly held operational leaders accountable for reducing turnover, then managers would not have focused their time and attention on employee retention.

The next step, goals, involves having operations leaders establish and communicate specific turnover reduction goals to first-level managers and their leaders. This goal setting process is similar to how companies set financial revenue, sales, and operations targets. It is important that leaders view turnover goals as business objectives equal in importance to other financial goals found on their profit and loss (P&L) plans.

The third step, stay interviews, is at the core of the Finnegan’s Arrow methodology.² It involves teaching managers how to engage employees so they will share issues that impact retention risk. Stay interviews are built around five topics:

1. What things do you look forward to when you come to work each day?
2. What are you learning at work? What would you like to learn?
3. Why do you stay here?
4. When was the last time you thought about leaving? What prompted it?
5. What can I do to make your experience at work better for you?

Finnegan discusses the psychology behind the design of stay interviews and how they build manager trust. He also stresses why stay interviews are Step 3. Steps 1 and 2 create the conditions necessary for the adoption of stay interviews. Implementing stay interviews without creating these conditions inevitably results in limited, inconsistent use of the method and little impact on turnover.

The last two steps, forecasts and accountability, serve to build and maintain a culture focused on employee retention. They involve having managers meet on a regular basis with their leaders and peers to discuss turnover challenges, share tips for increasing retention, and discuss the likelihood of hitting turnover targets. These methods ensure managers feel supported in their efforts to increase retention. The cultural challenge, as Finnegan notes, is maintaining focus on retention as a critical business goal: “[the company stopped] the monthly reporting against goals. Turnover immediately increased because pressure was shifted to some other metric” (p.28).

Targeting Turnover finishes with chapters discussing the shortcomings of other methods used to increase employee retention, including exit surveys, engagement surveys, external benchmarking studies, and financial incentives. It also includes a series of case studies illustrating results achieved using the Finnegan’s arrow methodology. The method is particularly effective when applied to frontline, operational shiftwork positions common in the healthcare, manufacturing, retail, and maintenance industries. When applied consistently and rigorously, it consistently resulted in reductions in turnover by 25% or more. These sections of the book might seem a bit light for psychologists who study turnover methods and are relatively tangential to the book’s core value.

Why I Like This Book

My second book was called Commonsense Talent Management (Hunt, 2014) because experience working with hundreds of companies had shown me the most powerful workforce interventions were often rooted in basic, well-established psychological principles tied to goal setting, accountability, and communication. In that book, I commented that “creating a healthy workplace is like living a healthy lifestyle. It is usually not a matter of knowing what to do. It is about doing it on a regular basis.” The book Targeting Turnover embodies this philosophy, applying fundamental, well-established psychological findings to address one of the most pervasive and costly issues in workforce management.

In an earlier SIOP commentary (Hunt, 2018), I noted the need for more research studying why companies do not adopt well-established psychological methods that are known to influence employee engagement and commitment. In this article, I commented on the value of having a “Journal of the Application of Psychology” that would focus on understanding how to get companies to utilize research findings found in the Journal of Applied Psychology. If such a journal were to be created, Finnegan’s work on figuring out how to get companies to adopt core psychological principles to address employee retention would make for an excellent lead article.

Notes

1 In full disclosure, I have done work with the author Richard Finnegan. This review was written independently of this work. I receive no financial compensation associated with writing this or any other book review or article published through SIOP.

2 Finnegan has been credited for inventing the phrase “stay interview” in his book The Power of Stay Interviews for Engagement and Retention (Finnegan, 2012).

References

Finnegan, R.P. (2012). The power of stay interviews for engagement and retention. Society of Human Resource Management.

Finnegan, R.P. (2025). Targeting turnover: Make managers accountable, win the workforce crisis. Barett Koehler.

Hunt, S.T. (2014). Commonsense talent management: Using strategic human resources to improve company performance. Wiley.

Hunt, S. T. (2018). If robust science is relevant science, then make I-O psychology research more relevant: Thoughts from a practitioner point of view. Industrial and Organizational Psychology, 11(1), 65–70. https://doi.org/10.1017/iop.2017.87

Rubenstein, A. L., Eberly, M. B., Lee, T. W., & Mitchell, T. R. (2018). Surveying the forest: A meta-analysis, moderator investigation, and future-oriented discussion of the antecedents of voluntary employee turnover. Personnel Psychology, 71(1), 23–65. https://doi.org/10.1111/peps.12226