Employee
Retention Article
Transforming Your Workforce from High-Turnover to High-Retention
Gregory P.
Smith
 It costs
$4-7K to replace an hourly worker and up to $40K to replace a midlevel,
salaried employee. Replacement costs usually are 2.5 times the salary of
the individual. The costs associated with turnover include lost customers,
business, and damaged morale. In addition are the hard costs of time spent
in advertising, screening, verifying credentials, references,
interviewing, hiring, and training the new employee just to get back to
where you started.
This
expenditure of time and money does nothing to give a manager or an
organization a competitive edge. However, despite these known costs and
loss of productivity, a research company reports 54 percent of businesses
do nothing to create a high-retention culture or reduce high employee
turnover. The revolving door keeps moving – employees leave, managers
interview and hire more workers, allowing competitors with low turnover to
focus more on productivity.
People
want to be part of an organization that stands for something that provides
them with personal fulfillment and meaning. Singapore International
Airlines (SIA) prides itself on customer service. They improved retention
ratios by placing more time and effort in the selection and training of
employees and aligned the training to support the organization’s mission
goal of providing excellent customer service. Today when customers are
happy, they express their appreciation to SIA employees who are proud of
being on the SIA team.
General
Ulysses S. Grant once said, "There are no bad soldiers, only bad leaders"
to remind us that poor leaders and managers can be a problem and on-going
leadership development is critical.
Businesses
must focus on workplace flexibility to stay competitive. The downsized,
super competitive work environment of today often forces employees into
putting their family in a secondary position. The Randstad North American
Employee Review recently found in a survey that only 34 percent of the
American employees now want a traditional full-time job.
Communication talks. In 1995, the Boeing Company suffered its
second-longest walkout ever when the Machinists Union led a 69-day strike.
Boeing lost hundreds of millions of dollars and experienced big customer
service headaches when they missed the delivery dates on 36 planes.
Boeing’s President, Frank Shrontz, later acknowledged the strike was a
result of management’s failure to communicate with the workforce about
their concerns. UPS provides another example where they lost over $700
million in revenues and customer trust when UPS failed to communicate with
their workforce.
People
want to enjoy their work environment. Some work is boring, but findings
suggest providing employees something to talk about – future goals they
can conquer or results that have been achieved. Sports teams keep players
motivated. Often organizational bureaucracy kills the spirit and ideas of
employees who want to contribute.
Rewards
and recognition are critical to achieving organizational goals. All humans
need to feel appreciated. In a survey conducted by Robert Half
International, the results showed that recognition and praise was the
number one reason employees stay in their work environment with fair
compensation being secondary. Smith’s book provides low-cost, easy to
implement, "fair" recognition programs that keep people focused and
heading in the right direction.
Employees
migrate to training and career development opportunities. If employees are
blocked into a specific or dead end job with no opportunity for promotion
or variety, they will leave – especially Gen X and Gen Y workers. An ASTD
study showed that leading-edge companies trained 86 percent of their
employees whereas average companies trained only 74 percent. Companies
that invest in workplace learning yielded higher net sales and gross
profits per employee.
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Greg Smith is a nationally recognized
speaker, author, and business performance consultant. He has written
numerous books and has been featured on television programs such as
Bloomberg News, PBS television, and in publications including Business
Week, Kiplingers, President and CEO, and the Christian Science
Monitor. He is the President and "Captain of the Ship" of a
management-consulting firm, Chart Your Course International, located in
Atlanta, Georgia. Phone him at 770-860-9464. More articles available:
http://www.chartcourse.com |
