In a human resources context, turnover or labour turnover is the rate at which an employer gains and loses employees. Simple way to describe it are "how long employees tend to stay" or "the rate of traffic through the revolving door." Turnover is measured for individual companies and for their industry as a whole. If an employer is said to have a high turnover relative to its competitors, it means that employees of that company have a shorter average tenure than those of other companies in the same industry. High turnover may be harmful to a company's productivity if skilled workers are often leaving and the worker population contains a high percentage of novice workers.
Excessive turnover can be a very costly problem, one with a major impact on productivity. One firm had a turnover rate of more than 120% per year! It cost the company $1.5 million a year in lost productivity, increased training time, increased employee selection time, lost work efficiency, and other indirect costs.
But cost is not the only reason turnover is important. Lengthy training times, interrupted schedules, additional overtime, mistakes, and not having knowledgeable employees in place are some of the frustrations associated with excessive turnover. Turnover rates average about 16% per year for all companies, but 21% per year for computer companies.54 Computer companies average higher turnover because their employees have many opportunities to change jobs in a “hot” industry.
Many studies show that companies with low turnover rates are very employee oriented. Employee oriented organizations solicit input and involvement from all employees and maintain a true "open-door" policy. Employees are given opportunities for advancement and are not micro-managed. Employees believe they have a voice and are recognized for their contribution.
Facts [+]
There are three cost categories associated with employee turnover. Separation costs account for exit interviews, termination administration, severance pay, and unemployment compensation. Replacement costs account for attracting applicants, interviews, testing, and moving expenses. Vacancy costs account for increased overtime or temporary employee costs incurred while the position is unfilled.
Employee turnover costs can significantly affect the financial performance of an organization. On average, it costs a company about one-third of a new hire's annual salary to replace an employee. The cost to replace a minimum wage employee is about $3,700.
A vacated or unfilled job within an organization results in tangible, measurable costs as well as intangible costs. The intangible costs include the uncompensated increased workloads other employees assume during the vacancy, the added stress and tension during and after the turnover, declining employee morale, and decreased work group synergy.
There are three cost categories associated with employee turnover. Separation costs account for exit interviews, termination administration, severance pay, and unemployment compensation. Replacement costs account for attracting applicants, interviews, testing, and moving expenses. Vacancy costs account for increased overtime or temporary employee costs incurred while the position is unfilled.
Employee turnover costs can significantly affect the financial performance of an organization. On average, it costs a company about one-third of a new hire's annual salary to replace an employee. The cost to replace a minimum wage employee is about $3,700.
A vacated or unfilled job within an organization results in tangible, measurable costs as well as intangible costs. The intangible costs include the uncompensated increased workloads other employees assume during the vacancy, the added stress and tension during and after the turnover, declining employee morale, and decreased work group synergy.
TYPES OF TURNOVER
Turnover often is classified as voluntary or involuntary. The involuntary turnover occurs when an employee is fired. Voluntary turnover occurs
when an employee leaves by choice and can be caused by many factors. Causes include lack of challenge, better opportunity elsewhere, pay, supervision, geography, and pressure. Certainly, not all turnover is negative. Some workforce losses are quite desirable, especially if those workers who leave are lower-performing, less reliable individuals.
MEASURING TURNOVER
The turnover rate for an organization can be computed in different ways. The following formula from the U.S. Department of Labor is widely used. (Separation means leaving the organization.)
Number of employee separations during the month X 100
(Total number of employees at mid month)
For example, in a business with an average of 300 employees over the year, 21 of whom leave, labour turnover is 7%. This is derived from (21/300)*100.
Internal vs. external turnover
Like recruitment, turnover can be classified as 'internal' or 'external'. Internal turnover involves employees leaving their current positions and taking new positions within the same organization. Both positive (such as increased morale from the change of task and supervisor) and negative [such as project/relational disruption, or the Peter Principle (Peter Principle: Observation that in an hierarchy people tend to rise to "their level of incompetence." Thus, as people are promoted, they become progressively less-effective because good performance in one job does not guaranty similar performance in another. Named after the Canadian researcher Dr. Laurence J. Peter (1910-90) who popularized this observation in his 1969 book 'The Peter Principle.')] effects of internal turnover exist, and therefore, it may be equally important to monitor this form of turnover as it is to monitor its external counterpart. Internal turnover might be moderated and controlled by typical HR mechanisms, such as an internal recruitment policy or formal succession planning.
Employee turnover is caused by external and internal factors. External influences include local economic conditions and labor market conditions. Internal causes include such things as non-competitive compensation, high stress, poor working conditions, monotony, sub-par supervision, dysfunctional job fit, inadequate training, poor communications, and loose organization practices.
Reasons for Employee Turnover
Workforce managers, human resources professionals as well as industrial psychologists all have their own theories on the question of – “What are the reasons for employee turnover”.
Among the most common causes of employees leaving a company are:
Legal public holidays:
Most executives cited the lack of challenges or opportunity for career growth, rather than inadequate compensation, as the main reason they left their last job, according to a recent survey by executive search firm Korn/Ferry International. Twenty percent cited ineffective leadership, while 17 percent said the attractive job market was why they left their last jobs.
Facts [+]
Most executives cited the lack of challenges or opportunity for career growth, rather than inadequate compensation, as the main reason they left their last job, according to a recent survey by executive search firm Korn/Ferry International. Twenty percent cited ineffective leadership, while 17 percent said the attractive job market was why they left their last jobs.
Facts [+]
Most executives cited the lack of challenges or opportunity for career growth, rather than inadequate compensation, as the main reason they left their last job, according to a recent survey by executive search firm Korn/Ferry International. Twenty percent cited ineffective leadership, while 17 percent said the attractive job market was why they left their last jobs.
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The unintended costs associated with irregular schedules, night shifts and extended hours are eroding the profits of American businesses, according to a study by Circadian Technologies, Inc. The profit-eroding factors for businesses with shift operations include lower productivity, higher absenteeism,greater employee turnover, increased health care costs, and more job-related accidents.Among the most common causes of employees leaving a company are:
- Excessive workload, an employee doing the work of more than one person. This often entails overtime and necessitating the employee having to take work home. Many employees say that they become overwhelmed and overloaded with work. The increase in stress levels and pressure means that they cannot sustain it and will eventually seek employment elsewhere.
- Management not giving the employee sufficient recognition for the work done, or taking the credit themselves of giving it to the wrong person.
- Not giving the staff member sufficient power to make decisions to get the job done and to progress in the organization.
- Ongoing change initiatives giving the employee a sense of instability.
- Management not giving clear briefs and clear guidelines on their expectations of the employee.
- Poor leadership skills
- Poor leadership. Can you do much about this one? Absolutely. It’s far more prevalent than most imagine, and it has an astounding impact on employee turnover rates and costs.
- Salary. 20% of workers cite this as their top employee retention consideration.
- Employee benefits packages. Another 20% claim this as their most important employee retention consideration. Far more than salary, an effective employee benefits plan can generate an exceptionally high ROI as an employee retention strategy.
- Lack of education opportunities. Employees’ top request was for professional education and enhancement programs. Another name for stagnant employees: job seekers!
- Poor wellness offerings. If your staff doesn’t like your employee health and wellness programs, they are four times more likely to leave your company.
- Toxic workplace environment. This is due in part to poor leadership, but interpersonal stress at the workplace contributes to absenteeism and low employee motivation, and ultimately, high employee turnover rates.
- Lack of progression opportunity. If your employees see no hope for promotion, they will absolutely look elsewhere for employment. So if the idiot son-in-law is a permanent fixture in the corner office, beware!
- Personal reasons. There’s not much you can do about this one. Just like the toymaker elf who wanted to be a dentist, if an employee’s life ambition takes them in a different direction, your best bet is to let them go.
- Lack of FUN. The best jobs I’ve ever had have been fun. Not surprisingly, they’ve also been the jobs at which I’ve worked the hardest and produced the most. The same holds true for your employees. Do everything possible to add fun back into life at work.
- Lack of life balance. Give your employees time away. Make sure they take it. And give them a vehicle to take high-end destination vacations at low cost. The mental and physical health benefits of wellness travel are staggering, and the impact on retention is powerful.
Many U.S. employers recognize 10 federal holidays, if not more.
Organizations commonly provide nine or ten days per year as public holidays, although there is no standard. Federal holidays, or legal public holidays, are recognized by Congress but are not observed by all employers.
Organizations commonly provide nine or ten days per year as public holidays, although there is no standard. Federal holidays, or legal public holidays, are recognized by Congress but are not observed by all employers.
Legal public holidays:
- New Year's Day, January 1
- Martin Luther King, Jr. Day, the third Monday in January
- Washington's Birthday, the third Monday in February
- Memorial Day, the last Monday in May
- Independence Day, July 4
- Labor Day, the first Monday in September
- Columbus Day, the second Monday in October
- Veterans Day, November 11
- Thanksgiving Day, the fourth Thursday in November
- Christmas Day, December 25
Minimizing Employee Turnover
Today's workforce seeks development, opportunity and job satisfaction. At one time, it was more common for workers to remain with one company for the duration of their career. Due to changing employee needs coupled with a competitive job market, employee turnover is on the rise.
The effects of turnover can be extremely costly. With departing employees comes the loss of intellectual capital, as well as costs associated with recruiting, hiring and training new personnel.
If your company is experiencing a pattern in employee turnover due to unsatisfied employees, there are steps you can take to improve retention rates, including:
1. Hiring employees with the right "fit". Compatibility is critical to retention. Behavioral based interviewing and competency screening goes a long way in determining personality, work style and potential match and success within your company.
2. Hiring older workers. Consider hiring candidates who are seeking stability. Older applicants may not be looking for the development opportunities that their younger counterparts may be in need of.
3. Describing the job correctly. Make sure you describe the job as accurately as possible so candidates will know what is expected. Misconceptions regarding the job responsibilities and work environment are one of the major causes of employee turnover.
4. Developing competitive compensation and benefit packages. Understand and research market pay ranges in your area and consider the value of benefits and employee perks; offering such extras to your workforce may be the key to your retention efforts.
5. Challenging your employees. Employees want to be challenged in the job they are performing to feel like they are growing both personally and professionally when challenged with attainable assignments.
6. Providing excellent supervision. Incompetent supervisors are often one of the first issues linked to employee turnover. No one wants to work for a manager who cannot adequately complete the tasks of his or her job, who is not passionate about the work being done and who fails to provide regular feedback. Providing better employee supervision as well as enhanced communication helps decrease employee turnover.
7. Recognizing employee success. It is important to let your employees know that their work does not go unnoticed. Employees are more willing to stay with a company if they feel a sense of pride and success in their work. When employees meet or succeed your expectations, show your appreciation for a job well done.
8. Providing an employee-friendly work environment. Be accommodating to your employees' outside demands. Providing employees with flexible schedules makes for a productive, satisfied workforce. The stress of balancing work and life diminishes when employees can work around their outside obligations.
9. Career Advancement Opportunities: Whenever possible, provide opportunities within the company for cross-training and career progression. Employees are seeking to develop themselves, and offering that opportunity to them may provide the satisfaction and stability they are seeking.
The bottom line is that it's extremely important to understand the impact of turnover in your business and determine the reasons why employees are leaving. The most effective way to do so is by conducting exit interviews with departing employees. This strategy alone will help you make adjustments that will reduce future turnover.
The effects of turnover can be extremely costly. With departing employees comes the loss of intellectual capital, as well as costs associated with recruiting, hiring and training new personnel.
If your company is experiencing a pattern in employee turnover due to unsatisfied employees, there are steps you can take to improve retention rates, including:
1. Hiring employees with the right "fit". Compatibility is critical to retention. Behavioral based interviewing and competency screening goes a long way in determining personality, work style and potential match and success within your company.
2. Hiring older workers. Consider hiring candidates who are seeking stability. Older applicants may not be looking for the development opportunities that their younger counterparts may be in need of.
3. Describing the job correctly. Make sure you describe the job as accurately as possible so candidates will know what is expected. Misconceptions regarding the job responsibilities and work environment are one of the major causes of employee turnover.
4. Developing competitive compensation and benefit packages. Understand and research market pay ranges in your area and consider the value of benefits and employee perks; offering such extras to your workforce may be the key to your retention efforts.
5. Challenging your employees. Employees want to be challenged in the job they are performing to feel like they are growing both personally and professionally when challenged with attainable assignments.
6. Providing excellent supervision. Incompetent supervisors are often one of the first issues linked to employee turnover. No one wants to work for a manager who cannot adequately complete the tasks of his or her job, who is not passionate about the work being done and who fails to provide regular feedback. Providing better employee supervision as well as enhanced communication helps decrease employee turnover.
7. Recognizing employee success. It is important to let your employees know that their work does not go unnoticed. Employees are more willing to stay with a company if they feel a sense of pride and success in their work. When employees meet or succeed your expectations, show your appreciation for a job well done.
8. Providing an employee-friendly work environment. Be accommodating to your employees' outside demands. Providing employees with flexible schedules makes for a productive, satisfied workforce. The stress of balancing work and life diminishes when employees can work around their outside obligations.
9. Career Advancement Opportunities: Whenever possible, provide opportunities within the company for cross-training and career progression. Employees are seeking to develop themselves, and offering that opportunity to them may provide the satisfaction and stability they are seeking.
The bottom line is that it's extremely important to understand the impact of turnover in your business and determine the reasons why employees are leaving. The most effective way to do so is by conducting exit interviews with departing employees. This strategy alone will help you make adjustments that will reduce future turnover.
Facts [+]
The Domino's Pizza chain focused on its store managers to reduce worker turnover from a staggering 158% down to 107%, according to a StartupJournal.com article. To accomplish this, Domino's HR department deployed a store manager strategy of hiring more selectively, coaching them on how to create better workplaces, and motivating them with the promise of stock options and promotions.
Consumer products maker SC Johnson ranked number seven on Fortune Magazine's 100 Best Companies to Work For. The company has a devoted workforce as evidenced by its remarkably low turnover rate of two percent. Among SC Johnson's unique employee perks are: flexible work schedules, no meeting day Fridays, paid sabbaticals, and lifetime membership at the company fitness center.
The Domino's Pizza chain focused on its store managers to reduce worker turnover from a staggering 158% down to 107%, according to a StartupJournal.com article. To accomplish this, Domino's HR department deployed a store manager strategy of hiring more selectively, coaching them on how to create better workplaces, and motivating them with the promise of stock options and promotions.
Consumer products maker SC Johnson ranked number seven on Fortune Magazine's 100 Best Companies to Work For. The company has a devoted workforce as evidenced by its remarkably low turnover rate of two percent. Among SC Johnson's unique employee perks are: flexible work schedules, no meeting day Fridays, paid sabbaticals, and lifetime membership at the company fitness center.
Signs That Your Employee Turnover Is Too High
What is your organization's ability to retain the brightest, most experienced and dedicated staff! These are the people who keep everything running smoothly day after day.
Personnel gurus are projecting that when economy repairs itself, turnover rates in many organizations are likely to skyrocket. A study by PreVisor Corporation reported that 68% of companies are concerned about retaining employees during the economic recovery while 54% concerned about recruitment. Now is the time to plan before opportunities begin opening up.
Many employers are strategic about decisions effecting employee satisfaction levels. The models for these kind of organizations are Southwest Airlines, Wegman's Super Markets, Zappos, Joie de Vivre Hotels just to name a few. Other organizations see turnover as an inevitable part of the cost of doing business. Of course, some turnover is inevitable.
Managing turnover is a solid strategic decision. It needs to be an ongoing priority. First, you need to objectively evaluate your scorecard. Here are thirteen characteristics of organizations with high turnover. If you decide that four or more are true for your organization then it is time to take action and to establish a retention plan.
You may have a turnover problem if you:
This kind of strategic planning takes time and a team. But it can be done. You may need to engage technical assistance.. Whatever you need to do, do it now because the rewards you will reap will far outstrip the cost of your investment.
Personnel gurus are projecting that when economy repairs itself, turnover rates in many organizations are likely to skyrocket. A study by PreVisor Corporation reported that 68% of companies are concerned about retaining employees during the economic recovery while 54% concerned about recruitment. Now is the time to plan before opportunities begin opening up.
Many employers are strategic about decisions effecting employee satisfaction levels. The models for these kind of organizations are Southwest Airlines, Wegman's Super Markets, Zappos, Joie de Vivre Hotels just to name a few. Other organizations see turnover as an inevitable part of the cost of doing business. Of course, some turnover is inevitable.
Some staff will leave to continue an education or follow a spouse. Others are offered life-changing opportunities that should not be turned down. Too often however, turnover decisions do not represent a move forward in the life of the employee. It means they were sick and tired of poor supervisors so they took a similar job for 10 cents more an hour. Managers and organizational leaders shrug their shoulders about these separations seeing the problem as financial. Rarely is money the real or only reason why people leave a job. Successful organizations manage turnover and they will always have a leg up on the competition.
Managing turnover is a solid strategic decision. It needs to be an ongoing priority. First, you need to objectively evaluate your scorecard. Here are thirteen characteristics of organizations with high turnover. If you decide that four or more are true for your organization then it is time to take action and to establish a retention plan.
You may have a turnover problem if you:
- Spend too much money on overtime
- Have significant recruitment advertising costs
- Pay employees $10 an hour or less; they are prime turnover candidates
- Have supervisors doing lower level worker tasks
- Have Supervisors covering shifts during vacancies
- Do not regularly analyze employee half-life, new employee first year retention, short term turnover and other turnover rate calculations
- Do not regularly analyze the hard and soft costs of separation and replacement of employees.
- Find yourself cutting back on program activities or organizational plans because you are short staffed
- Use Temp Agencies to supply temporary or locum tenens workers
- Have critical incidents resulting from staff mistakes that tie up manager's time in investigations
- Have high daily absenteeism
- Have employees who are present but not fully engaged in their work.
- Feel like you are a training ground for your competitors
This kind of strategic planning takes time and a team. But it can be done. You may need to engage technical assistance.. Whatever you need to do, do it now because the rewards you will reap will far outstrip the cost of your investment.
It Costs How Much to Replace an Employee
Retaining your good employees
The Right People in the Right Places
Studies show that the average cost to replace a worker in the US is $17,000.00 (AVERAGE!!). Some HR managers use the rule of thumb that whatever the person's annual salary is - it will cost that much to replace them. One study evaluating the effects of the US Family Medical Leave Act found that "turnover costs for a manager average 150% of salary, including real costs of hiring... and intangible costs such as the new worker's inefficiency and lost productivity while the job is vacant."
There are three cost categories associated with employee turnover. Separation costs account for exit interviews, termination administration, severance pay, and unemployment compensation. Replacement costs account for attracting applicants, interviews, testing, and moving expenses. Vacancy costs account for increased overtime or temporary employee costs incurred while the position is unfilled.
Let's put this in real terms. The lowest number seen anywhere says it will cost you at least 30% of an employee's total annual compensation to replace them. Assume you have 100 employees and your average salary is $10.00 per hour. At $10.00 per hour + benefits (at 20% of wages), your employees receive ~$12.00 hour in wages and benefits. Let's say that you have to replace 15% of your employees every year. Taking the most conservative estimate for employee turnover costs that I have been able to find (30% of their annual wages and benefits); each employee you have to replace is costing you $7,488.00.
100 employees X 15% X $7488 (including benefits) = $112,320 per year.
And that is using the most conservative cost percentage one can find. If we decide to use the national average ($17,000 / replaced employee) the cost goes to $255,000.00. By using the 'rule-of-thumb' (100% of their annual salary - $20,800.00/ replaced employee), the cost will go to $312,000.00... Staggering!
Other costs include:
Put together a complete job description with tasks and duties outlined in a clear and concise way so that when someone answers your want ad, they know what they are applying for. Minimize that catch-all phrase "Other duties as assigned". This way, the employee knows what is expected of the position and the manager knows what to evaluate for performance reviews.
Pre & Post employment testing:
Job match/satisfaction can be measured by using the testing and evaluation systems that are available through RP2-Consulting. The cost of these evaluation and testing programs is significantly less than the cost of turnover in the first example above. We can test a candidate before they even show up for an interview and tell you if they have the right attitude, will show up for work when expected and won't take everything in the supply cabinet home with them. We can match new candidates to a given position. We have all heard of the 'Peter Principle' (Peter Principle: Observation that in an hierarchy people tend to rise to "their level of incompetence." Thus, as people are promoted, they become progressively less-effective because good performance in one job does not guaranty similar performance in another. Named after the Canadian researcher Dr. Laurence J. Peter (1910-90) who popularized this observation in his 1969 book 'The Peter Principle.'). We can look at your existing employees and match their skills and personalities with open positions in the organization. We can also help you identify the right people to put on teams. When teams are balanced (one person's strengths cover another person's weaknesses), results are significantly improved. Finally, managers (and CEO's) need to know their strengths and weaknesses, as those who work with them perceive them. Testing can show you what your true strengths and weaknesses are so that you can focus on improving those things that need to be improved.
Training:
Expecting someone to produce when they do not know how to produce, or what results are needed is absurd. Yet every day, people are hired to do jobs in which they have little or no formal training. Make sure that your employees get the training and guidance they need to meet your expectations. This will lead to better employee job satisfaction and reduced management stress. As a significant side benefit, well-trained employees are more likely to win appreciation for a job well done; and appreciation and recognition among your peers is a huge motivator. We can help you design your training programs to meet your individual needs.
Leadership:
The best plans and initiatives are all for naught if your leadership does not focus on what is working and where you want to go. Have you ever been backing out of your driveway focused on the trash-can you had to avoid hitting at all costs - it's right there in the mirror, just behind the vehicle, if you hit it your whole morning will be ruined - and like a laser, you run right into it...
We go where we focus. One key to your success is to focus on retaining your employees. Working to make them successful is far less expensive than replacing them. Treating them with respect and honor while making them feel like they have a stake in the company and its success will lead to your success. Focus on where you want to go not where you don't want to go. Looking at mistakes and finding fault is focusing on the past and the errors made there. Learn from mistakes and move on. Plan the future your organization wants. Focus on applauding success, both individually and for the team/company.
The Right People in the Right Places
Studies show that the average cost to replace a worker in the US is $17,000.00 (AVERAGE!!). Some HR managers use the rule of thumb that whatever the person's annual salary is - it will cost that much to replace them. One study evaluating the effects of the US Family Medical Leave Act found that "turnover costs for a manager average 150% of salary, including real costs of hiring... and intangible costs such as the new worker's inefficiency and lost productivity while the job is vacant."
Costs of lost productivity are as important as direct costs such as advertising or temporary staff. Total costs easily reach 150% of the annual compensation. The cost will be significantly higher (200% to 250%) for managerial and sales positions.
Bliss & Associates Inc., Wayne, NJ consulting firm.
Facts [+]
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Employee turnover costs can significantly affect the financial performance of an organization. On average, it costs a company about one-third of a new hire's annual salary to replace an employee. The cost to replace a minimum wage employee is about $3,700.
A vacated or unfilled job within an organization results in tangible, measurable costs as well as intangible costs. The intangible costs include the uncompensated increased workloads other employees assume during the vacancy, the added stress and tension during and after the turnover, declining employee morale, and decreased work group synergy.
If you think you can just hire temporary workers and avoid all those costs, think again. The cost of hiring and getting production from a temporary worker is nearly 40% of their salary, and temporary workers tend to have higher hourly rates than permanent ones - and higher turnover rates as well.Let's put this in real terms. The lowest number seen anywhere says it will cost you at least 30% of an employee's total annual compensation to replace them. Assume you have 100 employees and your average salary is $10.00 per hour. At $10.00 per hour + benefits (at 20% of wages), your employees receive ~$12.00 hour in wages and benefits. Let's say that you have to replace 15% of your employees every year. Taking the most conservative estimate for employee turnover costs that I have been able to find (30% of their annual wages and benefits); each employee you have to replace is costing you $7,488.00.
100 employees X 15% X $7488 (including benefits) = $112,320 per year.
And that is using the most conservative cost percentage one can find. If we decide to use the national average ($17,000 / replaced employee) the cost goes to $255,000.00. By using the 'rule-of-thumb' (100% of their annual salary - $20,800.00/ replaced employee), the cost will go to $312,000.00... Staggering!
Why are the costs so high?
Why does it cost so much to replace a departing employee? Some costs, like paying off accrued vacation time or the cost of a help-wanted ad, are obvious.Other costs include:
- Increased unemployment insurance costs
- Lost productivity while there is a vacancy
- Time costs for the separation (Exit) interview (If your good employees are leaving, you NEED to know why)
- Separation agreement costs (legal, financial, medical, retirement cash-out, etc.)
- Overtime from other employees to handle the vacancy (which can lead to burn-out or absenteeism)
- Time costs to review resumes
- Time costs to interview candidates
- Interview expenses for the candidates
- Possible travel expenses
- Possible relocation expenses
- Head-hunter or signing bonus fees
- Additional bookkeeping; payroll, 401k, etc.
- Additional record keeping for government agencies
- Reduced productivity while the new worker gets up to speed
- Training programs
- Corporate history lost
- Morale can be affected
- Intellectual property lost
- Threat of lawsuit
- Bad PR from disgruntled employee
- Threat that the employee will take clients to a new firm
What can be done about it?
Job descriptions:Put together a complete job description with tasks and duties outlined in a clear and concise way so that when someone answers your want ad, they know what they are applying for. Minimize that catch-all phrase "Other duties as assigned". This way, the employee knows what is expected of the position and the manager knows what to evaluate for performance reviews.
Pre & Post employment testing:
Job match/satisfaction can be measured by using the testing and evaluation systems that are available through RP2-Consulting. The cost of these evaluation and testing programs is significantly less than the cost of turnover in the first example above. We can test a candidate before they even show up for an interview and tell you if they have the right attitude, will show up for work when expected and won't take everything in the supply cabinet home with them. We can match new candidates to a given position. We have all heard of the 'Peter Principle' (Peter Principle: Observation that in an hierarchy people tend to rise to "their level of incompetence." Thus, as people are promoted, they become progressively less-effective because good performance in one job does not guaranty similar performance in another. Named after the Canadian researcher Dr. Laurence J. Peter (1910-90) who popularized this observation in his 1969 book 'The Peter Principle.'). We can look at your existing employees and match their skills and personalities with open positions in the organization. We can also help you identify the right people to put on teams. When teams are balanced (one person's strengths cover another person's weaknesses), results are significantly improved. Finally, managers (and CEO's) need to know their strengths and weaknesses, as those who work with them perceive them. Testing can show you what your true strengths and weaknesses are so that you can focus on improving those things that need to be improved.
Training:
Expecting someone to produce when they do not know how to produce, or what results are needed is absurd. Yet every day, people are hired to do jobs in which they have little or no formal training. Make sure that your employees get the training and guidance they need to meet your expectations. This will lead to better employee job satisfaction and reduced management stress. As a significant side benefit, well-trained employees are more likely to win appreciation for a job well done; and appreciation and recognition among your peers is a huge motivator. We can help you design your training programs to meet your individual needs.
Leadership:
The best plans and initiatives are all for naught if your leadership does not focus on what is working and where you want to go. Have you ever been backing out of your driveway focused on the trash-can you had to avoid hitting at all costs - it's right there in the mirror, just behind the vehicle, if you hit it your whole morning will be ruined - and like a laser, you run right into it...
We go where we focus. One key to your success is to focus on retaining your employees. Working to make them successful is far less expensive than replacing them. Treating them with respect and honor while making them feel like they have a stake in the company and its success will lead to your success. Focus on where you want to go not where you don't want to go. Looking at mistakes and finding fault is focusing on the past and the errors made there. Learn from mistakes and move on. Plan the future your organization wants. Focus on applauding success, both individually and for the team/company.
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