Time & Attendance
By Garry Kranz
Feb. 20, 2012
What’s the best way to reduce the cost of turnover?
By training managers on its financial impact and holding them accountable for retention, says James Harris, director of human resources at Bost Inc., a not-for-profit that provides services to developmentally disabled people in western Arkansas.
It’s an old idea that took on new life for Harris while getting certified as a retention specialist at the Retention Institute, part of consulting firm Finnegan MacKenzie in Longwood, Florida. Harris says that the online program, spread over one year, couched retention as a strategic issue, not a tactical one.
It convinced him that Bost’s 33 department managers needed to be involved in solving chronic turnover by engaging workers and coaching for performance. It also emphasized the cost-benefit analysis of keeping people, particularly high performers. “I realized we were focusing on lowering the turnover rate, but we weren’t attaching an actual dollar cost to it,” something that managers are now doing routinely, Harris says.
Retention is a growing concern despite high unemployment in the U.S. More than 1 million workers voluntarily left jobs in October, the highest number in more than a decade, according to the U.S. Bureau of Labor Statistics.
Getting managers to assume the burden of retention may be easier said than done. Even though it sounds logical to do so, organizations typically don’t evaluate turnover as they do equipment and other capital costs, says Richard Galbreath, president of HR consulting firm Performance Growth Partners Inc., in Bloomington, Illinois.
Many managers would lose their cool if an employee’s negligence ruined an expensive tool, Galbreath says. “But when an employee leaves, there is often very little concern, except to refill the position as soon as possible,” Galbreath says.
Moreover, managers typically aren’t aware of turnover’s impact on the organization or given the tools to fix the problem. “Many, many supervisors don’t even think turnover is their responsibility,” Galbreath says.
It’s an attitude Harris set out to change at Bost, which operates a diverse range of facilities that includes preschools, apartment complexes, intermediate-care facilities and home-health services.
With so much to do, managers took a ho-hum approach when Harris first announced the turnover-reduction initiative. “At first they thought it was a ‘flavor of the month’ thing that would disappear.”
Managers quickly learned to take it seriously, though. Harris requested all 33 department heads to estimate how much money they were spending each month to recruit, hire and train replacements. The figures for each department were tallied and came to $966,000. The combined figure provided a baseline to slash turnover across the organization by at least 10 percent.
Having departments calculate their turnover forced them to take ownership of the issue, Harris says. “All we wanted was a benchmark to work from, but it had to be their number, not mine.”
Harris then applied peer pressure during monthly manager meetings. He began handing out a report that shows monthly turnover costs within each department. “Supervisors didn’t like the idea that their names appeared showing actual turnover costs for their departments,” Harris says.
The methodical approach resulted in an epiphany: One-third of the departments accounted for virtually all organizational turnover. Post-mortem meetings were convened in which department managers with good retention could share tips and techniques with peers who were struggling.
Manager training also was provided through Bost’s internal School of Leadership. The training includes workshops and role-playing exercises for resolving workplace conflicts, active listening and coaching for performance. In addition, managers have accountability goals for boosting retention as part of their annual reviews.
Bost’s annual turnover has plummeted to 21 percent from 35 percent. In comparison, turnover among workers in the developmental-disabilities field averages about 50 percent a year, according to the U.S. Department of Health and Human Services.
Still, Harris says Bost’s retention strategy is a work in progress. “As I told them, ‘We are not out to fire any supervisors. The object is to spark discussions about performance and offer help if you’re having turnover issues.’ “
Garry Kranz is a Workforce Management contributing editor. To comment, email email@example.com.
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