Question: Mitigating the effects of higher-than-usual employee turnover

We are a medium sized (about 120 people) single-location, service based organization. Coming out of the economic downturn, we are experiencing high turnover.

As we address this problem, we are also exploring ways to mitigate the impact of an employee leaving from our operations or service teams.

So, far we have boiled it down to one or a combination of the following

a. Detailed documentation of tasks by every associate
b. Cross-training between associates (each trains the other on his/ her tasks)
c. Hiring a bench (10 -15%) of non-production personnel

Is there a way for us to meaningfully approach the cost-benefit of these measures?

Thanks

Categories: OperationsStrategy









4 Expert answers





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9 answers

If you are experiencing high turnover, you have a very serious, systemic, problem that needs to be addressed in a more fundamental manner that the three ideas you have here.

Hiring a bench will only increase the number of disaffected employees you have and increase costs. I suspect you would be very disappointed with the results of this option.

Cross-training works very well in a culture of mutual respect with an engaged and inspired workforce. Based on the little you have told us, I'm afraid your workers are energetic, engaged and inspired, except for the 8 hours they work for you... If that is the case you will probably get very mixed, and not very satisfying, results from a cross-training effort until you address the issues that are causing the high turnover in the first place.

A well supported work system that includes effectively documented and easily learned processes is an essential part of getting and maintaining an engaged workforce - a true team - but it is only a part.

Space doesn't allow a more detailed answer, but the essentials to getting a dream team instead of continuing to deal with the employee nightmares you have now are these:

1) Build a touchstone for all business decisions consisting of a Vision, Mission Statement, and Values Statement. Look up what a touchstone is. Use your Vision, Mission, Values in the same way with every decision you make. Let the employees see that you are. Contact me for more details on what these are.

2) Identify the crucial contribution each role plays in your organization.

3) Work to replace management-imposed rules with peer-enforced standards.

4) Clearly tie positional Key Results and Key Performance Indicators to the Strategic Plan and Quarterly SMARTER Goals.

5) Market to the proper "fishing pond" for each position and use a diagnostic sales approach to hiring instead of the traditional "what are your skills/experience" approach.

Result: lower turnover, more productivity, team members driving you forward.

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11 answers

From the limited information you have given us it appears that your employees have no "buy-in" to the firm. Do you have, and share, your corporate "Vision"? Do employees have a reason to want to be a part of the Team? What is the reason they come to work everyday, other than the paycheck? What difference are they making in the world?

Until they understand, emotionally commit and concur with the reason the firm exists, you'll have a difficult time retaining quality people.

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67 answers

Both answers above have provided responses that take the focus from there being a meaningful cost benefit to your proposed solutions to something much more basic.  And I agree.  The business that you were a few years ago is not the one that is re-emerging now.  There's a process that I have employed numerous times that seems very appropriate in this situation.  I refer to it as "break it thinking".  When we operate in a way that we have used in the past ... and we're in a changing world ... is the time that we begin a downhill slide.  The break it thinking compels the team to come together and break all aspects of the business apart and reassemble it around the realities of today.   What has changed and what needs to change?     Listen to your people and determine what is having them leave because they can.

There are many possibilities and one reasonable guess is they feel they don't have a voice and yet they have lived through the struggle of the recent years.

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8 answers

Turnover is tough. It is a problem for a few reasons. First, it hinders the ability to get work done. Second, it signals to the remaining employees that there are issues. Third, its a huge emotional strain.

First, let's answer your question about "is there a meaningful way to create a cost benefit for the three mitigation techniques listed?"  Yes, simply identify the cost of each employee leaving. The industry accepted practice is to multiply the salary of the person that left by 1.5 to 3, depending on the complexity of their role. An example of this is: John's salary is $30,000. The cost of attrition for John is $30,000 X 1.5. That would be $45,000. You would do this for all the positions that have left. Then determine the cost of the three mitigation techniques.
- Documentation of tasks - probably about $25 - 40/hour of documenting tasks,
-  Cross-training employees - at a minimum it will be the hourly cost of the employee training AND the the employee being trained. If there is training material to develop, then that would add to the cost of the training
- Hiring bench strength, you would have to calculate the budget impact of that. That would be a combination of the employee cost (salary, benefits, etc.) and the cost to train them.

If the cost of the mitigation techniques are less then cost of employees lost, that's a benefit. But that is purely an accounting determination. The problem you are facing is probably a symptom of a larger organizational issue. My suggestion would be to get at the heart of that first. This can be done with interviews and surveys. Involving the remaining employees in solving the issues that are uncovered through the "detective" work is a GREAT way to start to stem the tide of attrition. They feel part of the solution, which they are.

Happy to share how to do this in a short call. Thanks!

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