EffortlessHR Blog » turnover

Understanding Employee Turnover

Lola Kakes — Wed, 28 Jul 2010 16:59:40 +0000

Many employers are facing turnover issues that they may not have had to deal with in the past. Some of the turnover is downsizing due to a tough economy. That type of turnover is not the common turnover that employers deal with consistently. It is usually a one time issue and hopefully will go away as the economy turns around.

The turnover I’m talking about is the “revolving door” of employees being hired, staying for a little while, and then leaving. This type of turnover can be symptomatic of a deeper, organizational problem. Some employers say, “So what. Turnover is inevitable and if the employee doesn’t want to stay, they should leave.” These employers don’t seem to understand how costly turnover is or care about the reasons for the turnover – which can also be costly.

Turnover affects your bottom line, whether you see it or not. Turnover is a silent but effective profit killer.

There are two areas of costs associated with turnover – Hard Costs and Soft Costs. Some of the hard costs that you can fairly easily identify are:

Wages of employee that is leaving
Cost of advertising
Cost of benefits of departing employee

But there are also other hard costs associated with the departing employee:

Employee’s supervisor/manager pay rate (they will most likely be covering for the departing employee)
Administrative staff pay (they are spending time filling out paperwork, answering questions, completing the termination process)
Coworker’s pay rate (they may be called on to work overtime to cover the departing employee or temporary workers may be contracted to cover the work)
Interviewing (takes a lot of time to conduct a series of interviews and you need to pay the interviewer – no matter what staff member(s) are conducting the interview)
Reference checking (either you do your own reference checking and pay your staff a wage or outsource and pay the outsourced company – there are fees involved)
Drug testing (if applicable there are fees for drug testing)
Orientation and on the job training (someone conducts the orientation, prints manuals and forms, answers questions, trains the new employee)

These are examples of hard costs associated with turnover. There are also soft costs, which may be more difficult to quantify but need to be addressed, including:

Loss productivity of employee (usually the exiting employee performs at 50-75% of norm)
Loss productivity of coworkers (time spent gossiping or taking on additional work load which may upset them)
Loss productivity of supervisor/manager (having to spend time dealing with employees and answering questions)
Productivity lost if position remains vacant (may increase overtime, temporary services, time spent filling in, supervisor/manager time spent on scheduling issues)
Lost productivity during training (new employee requires support and direction, existing employees may be distracted, supervisor/manager spends time with new employee)

If you look at the true cost of turnover, you may be surprised at just how costly it is to your bottom line. If you haven’t hired smart and there is not a good match between the company and the employee, you will eventually be a statistic – a company with high turnover. The old adage really is true – employees don’t leave companies, they leave managers. Look at why the turnover is happening and hopefully you will be able to put a stop to the Hard and Soft costs of turnover.

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Understanding Employee Turnover

From Employed to Engaged

Cathy Baniewicz — Tue, 21 Oct 2008 16:27:26 +0000

Mary Weather is one of your key employees. The customers ask for her by name and she is one of your best team leaders. Today she comes into your office and tells you that she has accepted an exciting opportunity. You are taken aback. What happened, you ask yourself? Of course, you’ll have an exit interview, but it’s too late to save Mary,

Turnover is costly:

At least one and a half times an entry level employee’s salary – much higher for management level staff.
Affects other employees – someone will have extra work until the new person is hired
Delays the company in meeting its goals
Upsetting for the customers – they don’t like to “train” new people

The latest buzz word with regard to employee retention is “engaged”. Will we recruit another body to be “employed”, or do we want someone committed to the organization, “engaged”?

What are the characteristics of an engaged employee?

They love with they do – job content is the key
Engaged employees are leaders as well as team players
They have a positive attitude – enthusiastic for new opportunities
Engaged employees understand the importance of customer service
They are committed and will go the extra mile
Engaged employees are less likely to leave the company

What is the secret to building and maintaining an engaged workforce.

1.) Recruit carefully

Define the job – know what you’re looking for
Determine performance criteria
Don’t hire in haste! Leave the position open until you find the right fit.

2.) Make “Onboarding” meaningful

Appoint a coach or mentor to ease the new employee’s transition into the workplace
Communicate what is expected during the introductory (probationary) period and who the employee can go to for assistance
Little things mean a lot – have all the basics in place like computers, office supplies, business cards, etc.

3.) Provide opportunities

Employees will leave a job if it doesn’t offer career development and challenges
If you are a small company and promotions are not readily available, important project work that provides for skill development should be considered to keep employees motivated.
Offer opportunities for continued professional development, i.e., seminars, membership in professional organizations, etc.
Where possible, offer flexible work schedules/telecommuting. Today’s diverse workforce faces challenges regarding child care, elder care, etc. A flexible employer is an employer of choice.

4.) Get the Wrong People Off the Bus!

From Good to Great: Why Some Companies make the Leap…and Others Don’t by Jim Collins

advises employers to get the right people in the right seats, and to get the wrong people off the

bus.

People get frustrated with co-workers who do not pull their weight. Companied who tolerate

poor performance will drive off the good employees

5.) Senior Management

Needs to “walk the talk”. So often it’s do what I say, not what I do.
Make a decided effort to know the employees on an individual basis.
Identify and weed out poor supervisors
Communicate on many levels, not exclusively by e-mail and text messages.

6.) Also Important

Reward employee contributions – do this in creative ways and do it often!
Recognize the generational differences and provide opportunities for employees of all age groups to work together.
Conduct period employee surveys – CAUTION – do not ask for suggestions if you have no intention to do anything with the feedback. This doesn’t mean you must act upon every suggestion, but surveyed employees need to have their input acknowledged.
Make certain that your salaries and benefits are competitive.

Strive for an Engaged Workforce. Your turnover will be lower, your customers will be more satisfied and your profitability will increase!

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Source: Effortless HR Software's HR Blog | From Employed to Engaged

Are you a Manager or an “Ogre”?

Lola Kakes — Thu, 26 Jun 2008 21:29:41 +0000

Employee retention is one of the key issues facing businesses of all sizes. We know that turnover is expensive – two and a half times an employee’s annual salary – more for a managerial level employee. Many think money is the key motivated, but it isn’t. People leave their managers, not their companies. Do you conduct yourself in a professional manner or do you:

Intimidate your employees – yell at people, throw tantrums in meetings, belittle people
Take credit for what others do, never accept blame when things go wrong
Micromanage, distrust people
Betray confidences, gossip and spread rumors
Constantly criticize, fail to praise your employee’s good work
Withhold important information or resources for the success of the project, job, etc.
Play favorites, inconsistently enforce policies and procedures
Act superior – do not ask for other’s opinions or suggestions
Set unreasonable deadlines
Have poor communication skills, i.e. use humor inappropriately, swear, etc.

If you’ve answered “yes” to any of the above, it’s time to take stock of your behavior and resolve to make changes to more effectively manage your employees.

You can:

Seek professional assistance if you have anger management issues.
Take a leadership training seminar or class to learn appropriate managerial behaviors
Live by the golden rule “Do Unto Others As You Would Have Them Do Unto You!”

Don’t let negative behavior drive your valuable employees out of the company!

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Source: Effortless HR Software's HR Blog | Are you a Manager or an “Ogre”?

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Understanding Employee Turnover

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