The Cost of Employee Turnover

There are an extremely low number of companies that do not have to contend with employee turnover. In some cases, turnover can be a good thing; however, if your turnover is high, it is a cost you should seriously try to avoid.

There are costs to the business regardless of the position that an exiting employee held. Of course; the higher the level of skill or responsibility the person had, the higher the cost to the company if the employee leaves.

How do you factor in the costs?  Here are some simple things to keep in mind that will hopefully help to illustrate why you want to keep your people. Hopefully, you don’t only want to keep them – but you want them to be happy and functional as well.

Consider:

• Cost of vacancy in terms of lost production or sales
• Cost of overtime
• Cost of temporary help (if required)
• Cost of time to advertise and recruit
• Cost of pre-employment administration time
• Cost of testing materials (development or purchase)
• Cost of time to review resumes/applications
• Cost of time for reviewing interview questions & strategy (x however many people are involved)
• Cost of lost time for those involved in interviewing (x however many people)
• Costs of training (you now have your new person who is not yet contributing and you have lost production from the person training)
• Costs of materials wasted during training phase
• Cost of literature (if applicable – employee handbooks for example)

This is not an exhaustive list – just a sample of what to think about. There are also potential costs in decreased performance by employees that remain – again – depending on the position the exiting person held.

Especially during difficult economic times when it’s very tempting to consider cut-backs in staffing levels; consider just a few of these items before you make that decision. If there is no way around the decision to cut back on staff, then at least consider who you let go – consider the cost.

Coaching for Improved Performance

We often hear about the need to coach our employees for improved performance; but what does that actually mean? 

To better understand coaching; think about the coach of a sports team or a professional singing coach. Coaching is not ‘soft and fluffy’ – it is a method by which individuals or teams are able to reach peak performance – and it can be hard work! It often means reviewing what went wrong, finding ways to ensure mistakes are not repeated and pushing through belief systems that may be impeding progress. Coaching for performance in the workplace is really no different than coaching in other environments. 

The biggest problem I’ve seen in coaching for performance in the workplace is the dread of any conversations that have anything to do with what may be perceived as negative. I think this is because we forget the fact that our intention should be to ‘coach’.

Look at it this way – If you had little Johnny playing hockey – wouldn’t you expect to see continual growth and improvement in his skills? If you didn’t, what would your impression of the coach be?

When you think in terms of coaching, be sure that both you and the recipient are clear on the goals you wish to accomplish.

• Be specific.
• Clarify current state.
• Spell out the expectations in terms of what kind of improvements you wish to see.
• Be sure to have timelines attached.
• Help the person being coached to understand his/her part.
• Give and receive feedback – feedback and more feedback.

Another thing to remember if you are coaching someone is to communicate that it’s safe to make some mistakes. Mistakes are really just experiences – and it is primarily through experience that we learn and grow.

Coaching has grown significantly in recent years because it works.

This is a skill that is well-worth developing – regardless of what level you are in your company. In today’s world, change is a constant and helping your people to perform at their best is crucial to your success. 

If you manage people – learn how to coach effectively – and I assure you – coaching for improved performance will take on an entirely different meaning.

Behaviours & Attitudes

There is an interesting conversation taking place on HRLinkedIn in which the following question was posted:

“Can changing a behavior really change an attitude? It’s often said that changing a workplace behavior can be “easily” done through strong and immediately enforced incentives/disincentives. But does changing a behavior also result is a changed attitude? What do you do with an employee who’s behavior has changed for the better but they still have a very “bad attitude” towards such things as racism, sexism, ageism, etc? Will this person change over time or will their continued attitude negatively infect others around them?” (Dr. Eli Sopow)

The feedback on the discussion seems to be wavering between whether behaviours change attitudes, or attitudes change behaviours. I think that attitudes are formed by one’s beliefs and these ultimately affect behaviours.

As an example, if you believe that your supervisor has no clue what you do on a day-to- day basis, you probably don’t have the best attitude toward him or her. Your poor attitude probably affects your behaviours and the way in which you do your work. You may speak poorly of your supervisor to peers; you may neglect certain tasks you have been asked to perform as you don’t personally see value in doing them.

 However, I think that if your supervisor were able to provide some background into what his/her experience is as it relates to your position (as an example) you may change your beliefs. This knowledge may very well change your attitude toward your supervisor. Maybe you will see that in fact, your supervisor has more of an awareness that you thought; and there is a ‘method to his madness’ so to speak.

Now, the bigger question is changing “attitudes” one has around racism, sexism, ageism, etc. Again, this is a belief system of some sort. You will never change everyone’s mindset; nor should that be your goal. At best, you may only be able to change the behaviour based on incentives/disincentives…and the attitude will remain.

I think that it is incumbent upon the leadership in an organization to clearly identify acceptable and non-acceptable behaviours. With the right environment and proper education around some of the mis-guided beliefs that are out there; you may be able to adjust some attitudes.

 As Karin Wills (one of the participants) stated: “If the behavior has changed then whether or not the person will influence others with their negative attitude likely depends on critical mass. If the person is alone in their attitude, others will ignore or challenge (most likely ignore) him; if there are others with the same attitude, he will be part of maintaining the culture that attitude reflects. The persons ability to influence will depend on what the culture allows.”

2010 and Beyond

I was listening to a radio program the other day and heard Richard Worzel of Future Search (http://www.futuresearch.com) speaking about the future trends as he sees it.

Canada, according to his predictions, will have “an uneven year, which is to say that some parts of Canada will do quite well, while others will continue to suffer.  Most of the suffering will be done in Central Canada – Ontario & Quebec – because of their reliance on manufacturing, especially in cars, their overwhelming ties to the United States, and the strength of the Canadian dollar.”

He speaks about job loss, people having continuing credit problems, and states that our current health care system in Canada is not sustainable. He believes that the health care crunch will be particularly felt in BC as many retirees are coming west due to the climate.

 Do his predictions mean ‘gloom and doom’ everywhere we look?  No, not necessarily. He also states “that because the leading edge of Canada’s baby boom will be entering their 70s by 2020, which will lead to lower economic growth, and shortages of skilled labor in many areas of the economy”.

 The next 10 years will be a decade of real potential combined with real challenges for Canada.

 While some of the challenges we will face may slow us down; they are not insurmountable.

 Another ‘futurist’ that you may have an interest in searching, is Gerald Celente. While he speaks far more to the American economy (http://www.trendsresearch.com) it’s still very interesting reading (and listening).

This blog is not intended to put fear into our hearts; it is just meant to be food for thought. No one can possibly predict the future; however, these two gentlemen follow trends in the economy for a living…maybe we should hear them out…

Review of 2009

2009 was a very interesting year indeed.

 At the beginning of the year, there was still a ‘hunt for talent’ and recruitment was fast and furious for most organizations; however, as the year wore on, it became evident that we were in for some turbulent economic times.

 These changes had a significant impact on Human Resources at every level.

Many businesses were putting a freeze on hiring.  In some cases, there were a number of employees laid off. Existing employees had to do more with less…and unfortunately… there were also those that had to ultimately close their doors.

Canada is very much influenced by what happens in the United States and in the last quarter of 2009, we heard daily news reports of what was taking place in their economic climate – and it wasn’t good news.

While the Canadian Business report stated that BC weathered the worst of the impact, they were not left entirely unscathed. The forest industry was hit hard. Pulp mills shut down all around the province; call centres that employed hundreds announced the closing of their doors; manufacturing plants were also downsizing due to the increase in the Canadian dollar, making their businesses less profitable.

“The recession cut a wide swath across the country, said Kirk LaPointe, managing editor at the Vancouver Sun, and “almost every Canadian was struck by job loss, wealth diminution or the prospect of uncertainty…”Canada — particularly British Columbia — is seen around the world as having weathered less of an impact from the recession, and it holds promise of allowing us to emerge more quickly from the downturn.”

http://www.canada.com/business/Recession+ranks+year+business+story/2383579/story.html

While this may have been a difficult year (and I personally don’t think we’re out of the woods yet); there are also some good news stories. People are becoming much more self-reliant and forming their own small businesses.  http://gdp.nfb.ca/stories. I think we will continue to see a rise in small business; and in fact, small businesses with fewer than 50 employees currently represent 97.8% of the total business establishments in Canada. In view of this statistic, I believe 2010 and beyond may prove to restore faith in ourselves and our abilities. http://www.cfib-fcei.ca/english/research/canada/33-small_business_facts/1328-small_business_profile.html

In closing, here is a quote from Premier Gordon Campbell: “Though 2009 was a tough year, we should all remember what can happen when we follow that time-honoured B.C. tradition of rolling up our sleeves and getting to work.”  http://www2.news.gov.bc.ca/news_releases_2009-2013/2009PREM0081-000792.htm