Managing staff turnover and retention.IntroductionManaging staff turnover to improve retention can lead to better recruitment, lower costs, improved morale and a better knowledge base. Some staff turnover is inevitable and beneficial, but too much is costly, especially in terms of recruitment and training resources. Turnover fluctuates with economic cycles and during a recession, for example, often falls. This may disguise underlying problems (such as dissatisfied staff or lack of new talent), so it is important to manage underlying factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc turnover, even though turnover itself may not always be a problem. Better management of employee turnover involves assessing the amount and types of turnover that are acceptable within your industry, exploring possible reasons for turnover, and considering what you can do to retain more staff. This checklist aims to help managers to better understand and manage staff turnover. National Occupational Standards for Management and Leadership This checklist has relevance to the following standards: D: Working with people, unit 3 Definition Turnover can be viewed as a whole, as the number of employees who leave within a given period or, more helpfully, it can be classified in three ways: * employer controlled (dismissals, redundancies and early retirements) * employee led (due to dissatisfaction of varying kinds) * employer and employee uncontrolled (maternity leave maternity leave n → baja por maternidad maternity leave maternity n → congé m de maternité maternity leave maternity n , retirement, etc.). Retention involves managing in ways which encourage staff to remain in employment with the organisation. Action checklist 1. Establish the extent of the problem Consider using one or more of the measurement techniques below: a. The global turnover rate for an organisation, otherwise known as the crude wastage wastage a loss of product or productivity; in terms of animal production includes losses due to deaths of animals, lowered production from survivors, including reproduction, and lost opportunity income. wastage Fetal wastage, see there index, is the most frequently used measure. It is calculated as follows: Leavers in year / Average number employed in year x 100 The advantage of this measure is that it is widely used, so comparisons can be made between companies. It has severe limitations, however, in including all leavers, and ignoring reasons for leaving, department in which they worked, age, and length of service. Relying on this technique may leave you with an imbalanced workforce, with, for example, all employees over 50 or under 30. b. The stability index is a frequently-used additional measure, usually calculated in this way: Staff with one year's service or more / Total staff one year ago x 100 c. Cohort analysis takes a group of employees who joined at the same time ,and tracks the way the group behaves over a period. The rate of leaving of this cohort can be plotted as a wastage curve. d. The Census Analysis method takes a snapshot of the total situation, rather than examining one group over a period. Leavers are studied in groups according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. length of service, and then plotted as a proportion of total staff in that group. e. Computer models for employment forecasting are used only in large firms and latterly have been less popular. 2. Benchmark your organisation against others One way of judging whether your turnover rates are reasonable is to compare them against national, regional or industry figures. The best regular sources of statistics are the surveys conducted by IFF 1. (file format) IFF - Interchange File Format. 2. IFF - Identify friend or foe (radar). 3. (mathematics, logic) iff - if and only if, i.e. necessary and sufficient. Research Ltd, the Confederation of British Industry The Confederation of British Industry is a not for profit organisation incorporated by Royal charter[1] which promotes the interests of its members, some 200,000 British businesses, a figure which includes some 80% of FTSE 100 companies and around 50% of FTSE 350 , and the Chartered Institute of Personnel and Development The Chartered Institute of Personnel and Development (CIPD) is the leading professional body for those involved in the field of personnel, training and development. Membership of the CIPD is highly respected and widely accepted by employers as a requirement of practice. . Employers can also turn to periodic studies of turnover in a particular sector. Some companies belong to informal employer networks where information on various personnel topics is exchanged. If you trade turnover statistics, make sure that you are clear on other firms' definitions, so that like is compared with like. Monitor labour market trends to assess how these will affect your organisation. These include demographic factors such as age or location; number of women, ethnic minorities and graduates in the workforce; and labour mobility. 3. Work out why turnover takes place External forces influencing turnover may include short supplies of some occupational groups, but internal factors are usually more significant. The work of motivation theorists is worth consideration. Expectancy Theory Expectancy theory is about choice. It explains the processes that an individual undergoes to make choices. In organizational behavior study, expectancy theory is a motivation theory first proposed by Victor Vroom of the Yale School of Management. , for example, calculates motivation in terms of the effects of individual employees' expectations and preferred outcomes, with expectancy (as defined by Vroom) meaning momentary beliefs concerning the likelihood of particular acts being followed by particular outcomes; Maslow's 'hierarchy of needs' theory argued that people's needs range from physical needs to self-actualisation; Herzberg distinguished between hygiene and motivation factors; and McGregor proposed that bosses tend to treat subordinates according to their own prejudices--that employees need to be directed and controlled (Theory X), or that, given the opportunity, all employees can make a significant contribution if encouraged (Theory Y). It is important to study physical or hygiene factors Hygiene factors are job factors that can cause dissatisfaction if missing but do not necessarily motivate employees if increased [1]. Hygiene factors have mostly to do with the job environment [2]. such as pay and working conditions, but other issues are just as important (some would argue more important) in determining people's attitudes towards their employment. Motivation factors vary with individuals, but may include: * working for an efficient boss * thinking for yourself * seeing the end result of work and gaining a sense of achievement * being assigned interesting and challenging work * being informed, listened to, and respected * being recognised for efforts * having opportunities for development * working with good and supportive colleagues * feeling valued. It is worth bearing in mind however, that organisations may appear to be following two apparently opposing directions: requiring more commitment and involvement of staff, while being simultaneously bent on Adj. 1. bent on - fixed in your purpose; "bent on going to the theater"; "dead set against intervening"; "out to win every event" bent, dead set, out to cost reduction, which may include getting rid of staff. In such conditions it could be argued that, though motivation factors may have come to the fore Verb 1. come to the fore - make oneself visible; take action; "Young people should step to the fore and help their peers" come forward, step forward, step to the fore, step up, come out , there is a danger that the more fundamental hygiene factors or safety needs of employees are neglected. 4. Ask employees why they leave Consider conducting an exit interview with leavers, or giving them a questionnaire to complete. Which ever approach is taken, structure it carefully, and do not rely on it as the only way of collecting data. The trends behind involuntary turnover should not be ignored. For example, a rise in health-related departures may give rise to concerns about health and safety at work. 5. Assess the effects of turnover The most obvious impact of turnover is that of increased costs. These fall into four tangible categories: * separation costs * temporary replacement costs * recruitment and selection costs * induction and training costs. Turnover can be self-perpetuating in that it affects the morale of those who stay. Gauge employees' reactions through employee attitude surveys. Turnover also causes inefficiencies, not least because of the disruption caused by resignations. There is a further, more intangible, category--that of the skills and knowledge which are lost to the organisation when an employee leaves. Difficult to quantify and assess, this again has implications for information-sharing as well as effective motivation. 6. Implement retention strategies Take steps to: * ensure pay rates are competitive * offer a wider choice of benefits, for example, sabbaticals, career breaks, childcare and eldercare eld·er·care n. Social and medical programs and facilities intended for the care and maintenance of the aged. arrangements * review recruitment literature to ensure it gives an accurate picture of the organisation and look at the quality of induction and training offered * improve job design and introduce flexible working practices such as job sharing job sharing Noun an arrangement by which a job is shared by two part-time workers job sharing job n → Jobsharing nt, Arbeitsplatzteilung f , flexitime flex·i·time n. See flextime. flexitime Noun a system permitting flexibility of working hours at the beginning or end of the day, provided an agreed total is worked , and teleworking * develop equal opportunities policies * promote career progression opportunities, such as dual career ladders The Career ladder is a metaphor or buzzword used to denote vertical job promotion. In business and human resources management, the ladder typically describes the progression from entry level positions to higher levels of pay, skill, responsibility, or authority. for technical and managerial staff * improve the quality of supervision and management. Managers should avoid * failing to monitor labour turnover * being misled by global turnover rates * spending money on retention without first exploring possible reasons for turnover * neglecting to consider more flexible hours, and other work-life balance The expression work-life balance was first used in 1986 in the US (although had been used in the UK from the late 1970s by organisations such as New Ways to Work and the Working Mother's Association) to help explain the unhealthy life choices that many people were making; they were considerations which may encourage more staff to remain with the organisation. Additional resources Books Workforce crisis: how to beat the coming shortage of skills and talent, Ken Dychtwald, Tamara J. Erickson and Robert Morison Robert Morison (1620 – October 10, 1683) was a Scottish botanist. Born in Aberdeen, Scotland, the standard botanical author abbreviation Morison is applied to species he described. Boston, Mass.: Harvard Business School Harvard Business School, officially named the Harvard Business School: George F. Baker Foundation, and also known as HBS, is one of the graduate schools of Harvard University. Press, 2006 The 7 hidden reasons employees leave: how to recognize the subtle signs and act before it's too late, Leigh Branham New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY: AMACOM AMACOM American Management Association , 2005 Recruitment retention and turnover 2004: a survey of UK and Ireland, London: Chartered Institute of Personnel and Development, 2004 Staff retention in a week, 2nd ed, Sue Browell Chartered Management Institute Inspiring Leaders The Chartered Management Institute is a professional institution for managers, based in the United Kingdom. In addition to supporting its members, the organisation encourages management development, carries out research, produces a wide variety London: Hodder and Stoughton, 2003 This is a selection of books available for loan to members from the Management Information Centre. More information at: www.managers.org.uk/mic Journal articles Benchmarking labour turnover 2006 part 1, Neil Rankin IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. Employment Review, 17 Feb no 841, 2006, pp 38-48 Benchmarking labour turnover 2006 part 2, Neil Rankin IRS Employment Review, 3 March, no 842, 2006, pp. 42-48 This is a selection of journal articles available from the Management Information Centre. More information at: www.managers.org.uk/mic Related checklists Introducing Flexible Working into your Organisation (026) Managing a Secondment Noun 1. secondment - a speech seconding a motion; "do I hear a second?" endorsement, indorsement, second agreement - the verbal act of agreeing 2. (044) The Psychological Contract (161) Work-Life Balance (193) Organisations Chartered Institute of Personnel and Development (CIPD CIPD Chartered Institute of Personnel and Development (UK) CIPD Conferencia Internacional sobre la Población y el Desarrollo (Mexico) CIPD Center for Innovation in Product Development ) 151 The Broadway, London Broadway (or sometimes The Broadway) is a street in the City of Westminster, in central London. It runs north from Victoria Street. Buildings include:
Tel: 020 8971 9000 www.cipd.co.uk Confederation of British Industry 103 New Oxford Street, London WC1A 1DU Tel: 020 7379 7400 www.cbi.org.uk IFF Research Ltd 16 Chart Street, London N1 6DD Tel: 020 7250 3035 www.iffresearch.com |
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