Hi every one,
I am Vijay Gaonkar working as Manager(PER & HR) for a keading English News Paper in GOA. I am in Personnel & HR Dept since last 15 years out of my total 33 years of service. I am more interested in knowing the topic on employees turnover in an Industry. Kindly share your views.
Wish you all the best and I invite you all to visit our lovely GOA.
Vijay A. Gaonkar
09423319937
From India, Pune
I am Vijay Gaonkar working as Manager(PER & HR) for a keading English News Paper in GOA. I am in Personnel & HR Dept since last 15 years out of my total 33 years of service. I am more interested in knowing the topic on employees turnover in an Industry. Kindly share your views.
Wish you all the best and I invite you all to visit our lovely GOA.
Vijay A. Gaonkar
09423319937
From India, Pune
What is Turnover?
Turnover is the attrition of employees through voluntary or involuntary terminations. Turnover results in costs to the employer from lost productivity, job advertising costs, training new employees, etc
Most HR professionals are well acquainted with the direct costs of replacing an employee. Interviewing, new hire processing, training, benefits, are only a few of the easily identifiable costs that quickly add up.
What many people don't know is that those direct costs amount to only about one-third of the total cost of employee turnover while indirect costs of turnover, such as lost productivity, lost sales, and dissatisfied customers account for the rest.
The causes of turnover
Many people mistakenly believe that employees leave jobs primarily for better wages, benefits, or both. The cause is more likely to be one of the following:
Understaffing
Lack of communication
Poor job fit
Understaffing Employees who survived layoffs and recessions with their jobs intact are working harder than ever. The reduced number of workers still shoulder the same (or larger) total workload that existed before staff-cuts. In 2002, worker productivity in the United States was at its highest level since the 1950s — 4.7%.
When productivity is high, organizations don't need to hire as many people. But it's hard for employees to be happy when, no matter how hard they work, they never catch up.
Most professionals have a backlog of 200 or more hours of uncompleted work, in spite of working harder. As a result, employees experience a strong need to balance the urgent demands of work and personal life without sacrificing either.
Lack of communication In focus groups, employees identified leadership's failure to provide a clear picture of the company's direction as a major reason for leaving a company. If you want to achieve better results and improve morale, clearly communicate where the company is going and why.
Employees want to know your vision and what, specifically, you want them to accomplish. Employees also want to know how you think they're doing — and not just during annual reviews. Regular and consistent feedback is essential for your workers to do the job you expect.
Poor job fit Many employees feel unfulfilled, bored, or "stuck" in their current positions. Cross-training gives employees more variety and managers more flexibility in the workforce. Adjusting job tasks can also increase worker satisfaction.
For example, UPS had a high turnover of drivers, a key position for the company. In talking with the drivers, UPS discovered that they hated to load their trucks but enjoyed the driving. So UPS designed a job classification of loading the delivery trucks, which cut turnover dramatically, because drivers no longer had to load trucks.
Strategies to prevent employee turnover
Preventing turnover is cost effective. It's cheaper to retain the employees you already have than to hire new ones — even a few. Here are some employee-retention strategies:
Recognize your impact as a manager
Implement effective work/life programs
Provide personal productivity training
Adjust or establish constructive Human Resources policies.
Recognize your impact as a manager People don't really quit companies, they quit managers. Many people leave simply because of the way they are treated every day. Surveys show that lack of appreciation, lack of teamwork, and the perception that the company doesn't care about employees are consistently the highest-rated reasons for low job satisfaction.
As an office manager, you must specifically communicate to employees that you appreciate their contributions, rather than talking to them only when they do something wrong. Use charts and graphs distributed through electronic bulletin boards and e-mail groups to keep your team informed of results and how they are moving toward company goals.
Implement effective work/life programs More and more organizations are looking to work/life programs to help employees cope with workplace stress. Many of Fortune's "100 Best Companies to Work for in America" cite work/life programs as one of their top tools to attract and retain the best employees and give their companies a competitive edge.
Corning, for example, estimates that it saves $2 million a year because of increased employee retention attributed to career and family initiatives. Aetna estimates that it saves $1 million a year because of its policy allowing employees to return to work part-time after family leaves. NationsBank (which merged with Bank of America in 1998) reported that two-thirds of its employees on flexible schedules would have left the company if flex-time had not been an option. Several studies have found that on-site childcare centers decrease turnover.
Provide personal productivity training Through proper productivity training, many people who work a 50–hour week can achieve those same results in 40 hours. You create mutual value for the company and employees when you:
Identify key employees, whose production rate and results are superior.
Help employees learn to achieve the same results in less time through productivity training.
Let employees leave the office earlier and get home to their lives.
Improve employee morale and job satisfaction to increase retention.
Both sides benefit from this win-win productivity proposition.
Employers:
Achieve the results they need without pushing employees over the edge.
Become an employer of choice.
Reduce staff turnover.
Employees:
Achieve more results in less time.
Balance work and personal lives.
Experience less stress.
Adjust or establish constructive Human Resources policies The methods described below can be technical and often have legal ramifications, so you should consult with HR and legal resources before implementing these policies.
Salary-level caps
Structure pay levels by job categories so that long-term employees don't price themselves out of their jobs. Properly structured salary-level caps prevent this situation because the salary for a given job will never be higher than the job is worth.
Phased-in benefit plans
Establish retirement plans that aren't fully vested until employees have many years on the job. This encourages people to stay. For example, an employee is 25% vested after two years, 50% after five years, and 100% after 10 years. Also award additional vacation time for each year an employee is with the company.
Performance-based salary increases
Create performance-planning and review programs that help you retain desirable employees. Frequent reviews and positive reinforcement reward and encourage high-performing employees. Poorer performers can be identified and assisted, then rewarded when they improve.
Solving the problem
Analyze your office with an eye toward the reasons behind high turnover: understaffing, communication problems, and poor job fit. Then put appropriate retention programs in place to address these issues. Good management techniques, open communication, feedback, positive reinforcement, work/life programs, time management training, and creative personnel policies all support employee retention.
Face the facts: You are renting talent, not buying the hearts and souls of workers. When your workers are more satisfied with the balance of their work and life, you gain company loyalty and retain desirable employees. You save money and training time and improve your own job performance and satisfaction for a win-win situation all around.
Attaching a good cost of turnover calculator
From India, Mumbai
49Turnover is the attrition of employees through voluntary or involuntary terminations. Turnover results in costs to the employer from lost productivity, job advertising costs, training new employees, etc
Most HR professionals are well acquainted with the direct costs of replacing an employee. Interviewing, new hire processing, training, benefits, are only a few of the easily identifiable costs that quickly add up.
What many people don't know is that those direct costs amount to only about one-third of the total cost of employee turnover while indirect costs of turnover, such as lost productivity, lost sales, and dissatisfied customers account for the rest.
The causes of turnover
Many people mistakenly believe that employees leave jobs primarily for better wages, benefits, or both. The cause is more likely to be one of the following:
Understaffing
Lack of communication
Poor job fit
Understaffing Employees who survived layoffs and recessions with their jobs intact are working harder than ever. The reduced number of workers still shoulder the same (or larger) total workload that existed before staff-cuts. In 2002, worker productivity in the United States was at its highest level since the 1950s — 4.7%.
When productivity is high, organizations don't need to hire as many people. But it's hard for employees to be happy when, no matter how hard they work, they never catch up.
Most professionals have a backlog of 200 or more hours of uncompleted work, in spite of working harder. As a result, employees experience a strong need to balance the urgent demands of work and personal life without sacrificing either.
Lack of communication In focus groups, employees identified leadership's failure to provide a clear picture of the company's direction as a major reason for leaving a company. If you want to achieve better results and improve morale, clearly communicate where the company is going and why.
Employees want to know your vision and what, specifically, you want them to accomplish. Employees also want to know how you think they're doing — and not just during annual reviews. Regular and consistent feedback is essential for your workers to do the job you expect.
Poor job fit Many employees feel unfulfilled, bored, or "stuck" in their current positions. Cross-training gives employees more variety and managers more flexibility in the workforce. Adjusting job tasks can also increase worker satisfaction.
For example, UPS had a high turnover of drivers, a key position for the company. In talking with the drivers, UPS discovered that they hated to load their trucks but enjoyed the driving. So UPS designed a job classification of loading the delivery trucks, which cut turnover dramatically, because drivers no longer had to load trucks.
Strategies to prevent employee turnover
Preventing turnover is cost effective. It's cheaper to retain the employees you already have than to hire new ones — even a few. Here are some employee-retention strategies:
Recognize your impact as a manager
Implement effective work/life programs
Provide personal productivity training
Adjust or establish constructive Human Resources policies.
Recognize your impact as a manager People don't really quit companies, they quit managers. Many people leave simply because of the way they are treated every day. Surveys show that lack of appreciation, lack of teamwork, and the perception that the company doesn't care about employees are consistently the highest-rated reasons for low job satisfaction.
As an office manager, you must specifically communicate to employees that you appreciate their contributions, rather than talking to them only when they do something wrong. Use charts and graphs distributed through electronic bulletin boards and e-mail groups to keep your team informed of results and how they are moving toward company goals.
Implement effective work/life programs More and more organizations are looking to work/life programs to help employees cope with workplace stress. Many of Fortune's "100 Best Companies to Work for in America" cite work/life programs as one of their top tools to attract and retain the best employees and give their companies a competitive edge.
Corning, for example, estimates that it saves $2 million a year because of increased employee retention attributed to career and family initiatives. Aetna estimates that it saves $1 million a year because of its policy allowing employees to return to work part-time after family leaves. NationsBank (which merged with Bank of America in 1998) reported that two-thirds of its employees on flexible schedules would have left the company if flex-time had not been an option. Several studies have found that on-site childcare centers decrease turnover.
Provide personal productivity training Through proper productivity training, many people who work a 50–hour week can achieve those same results in 40 hours. You create mutual value for the company and employees when you:
Identify key employees, whose production rate and results are superior.
Help employees learn to achieve the same results in less time through productivity training.
Let employees leave the office earlier and get home to their lives.
Improve employee morale and job satisfaction to increase retention.
Both sides benefit from this win-win productivity proposition.
Employers:
Achieve the results they need without pushing employees over the edge.
Become an employer of choice.
Reduce staff turnover.
Employees:
Achieve more results in less time.
Balance work and personal lives.
Experience less stress.
Adjust or establish constructive Human Resources policies The methods described below can be technical and often have legal ramifications, so you should consult with HR and legal resources before implementing these policies.
Salary-level caps
Structure pay levels by job categories so that long-term employees don't price themselves out of their jobs. Properly structured salary-level caps prevent this situation because the salary for a given job will never be higher than the job is worth.
Phased-in benefit plans
Establish retirement plans that aren't fully vested until employees have many years on the job. This encourages people to stay. For example, an employee is 25% vested after two years, 50% after five years, and 100% after 10 years. Also award additional vacation time for each year an employee is with the company.
Performance-based salary increases
Create performance-planning and review programs that help you retain desirable employees. Frequent reviews and positive reinforcement reward and encourage high-performing employees. Poorer performers can be identified and assisted, then rewarded when they improve.
Solving the problem
Analyze your office with an eye toward the reasons behind high turnover: understaffing, communication problems, and poor job fit. Then put appropriate retention programs in place to address these issues. Good management techniques, open communication, feedback, positive reinforcement, work/life programs, time management training, and creative personnel policies all support employee retention.
Face the facts: You are renting talent, not buying the hearts and souls of workers. When your workers are more satisfied with the balance of their work and life, you gain company loyalty and retain desirable employees. You save money and training time and improve your own job performance and satisfaction for a win-win situation all around.
Attaching a good cost of turnover calculator
From India, Mumbai
Dear Mr. Gaonkar,
First of all welcome to the forum. It's been really nice to know that an experienced person like you has joined the forum which would help all the forum members by your valuable suggestions.
Secondly, manpower turnover has become a major issue of concern across the industry for the past 1-2 years. It is becoming one of the major challenges for the HR to sustain the manpower. As the market is having such a boom and shortage of manpower, there are some employers who are paying like anything to get the best employees, thereby disturbing the whole industrial scenario.
Santosh Iyer
From India, Pune
First of all welcome to the forum. It's been really nice to know that an experienced person like you has joined the forum which would help all the forum members by your valuable suggestions.
Secondly, manpower turnover has become a major issue of concern across the industry for the past 1-2 years. It is becoming one of the major challenges for the HR to sustain the manpower. As the market is having such a boom and shortage of manpower, there are some employers who are paying like anything to get the best employees, thereby disturbing the whole industrial scenario.
Santosh Iyer
From India, Pune
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