ROI Tools to Support your Strategies for Reducing Employee Turnover
Category: UNCATEGORIZED
Nov
07
You have a new client coming in during your company’s busiest time of year. Your staff is already stretched to the limit and you are onboarding a new client while hiring to fill the additional staffing needs. Now, you need to make time to train a new employee. For a busy AMC leader, this can feel daunting. You and your team are already working longer than normal days. At the same time, having a good onboarding process and providing the right training can impact how your new employee engages with your company and how long you can retain them.
According to “Strategies for Reducing Employee Turnover and Tools for Calculating ROI” a white paper from the Incentive & Engagement Solution Providers (IESP), a Strategic Industry Group of the Incentive Marketing Association; Bureau of Labor Statistics show that on average, 27% (nearly a third) of employees, voluntarily leave their jobs each year. This results in their employers having to spend up to 20% of a person’s annual salary to replace each employee.
Not only is this expensive, 78% of association managers view vacant positions as unproductive, particularly vacancies in membership-related positions says PNP Staffing Group in their 2019 “Association Salaries and Staffing Trends” report.
With those numbers, and a tight labor market with less than 4% unemployment, it makes sense to have an organizational plan to manage employee retention. The IESP white paper outlines four concepts for reducing turnover and provides tools to help calculate costs.
Calculating the cost of employee turnover
Turnover costs include direct or “hard” costs such as advertising, overtime, temporary replacements, background checks, physical exams, travel, relocation, and employee referrals. There are also “soft” costs for time spent or lost through lower productivity, loss of morale, loss of customer contacts, interviewing, onboarding and training new hires to consider.
Identifying the reasons for turnover
“When looking at employee turnover, you’re not just looking at why one person leaves and what it costs to replace that person, you’re looking for bigger trends or issues the company can address to reduce turnover across the organization,” says Brant Dolan, CPIM, director business development, Quality Incentive Company, and IESP board member.
“Employers need to understand what employees like about working there, but also what frustrates or disappoints employees so they can address system-wide improvements as well,” Dolan explained.
From this information the supervisor and the organization can consider strategies for removing the obstacles to increase satisfaction and reduce frustrations.
Developing strategies to address the reasons for turnover
According to the IESP, once the reasons for turnover have been identified and prioritized, management should concentrate on addressing the top five. For example, if an employee has a high workload and feels undervalued, you could provide an incentive to achieve a stretch goal or look at reorganizing workloads to reduce the burden.
PNP Staffing Group noted that organizations successful in finding and holding onto the best staff in a competitive marketplace follow talent management best practices that are key to their success. Leaders are hearing from candidates that several elements are essential in making an organization a “go to” place to work. These include: managers are held accountable, performance is valued and rewarded, staff work in teams, the organization invests in coaching and training, clear opportunities are offered for professional growth, workplace is productive and supportive with clear opportunities for growth – and of course – a consistent onboarding process.
Calculating the ROI of reducing turnover
The IESP white paper comes with eight calculator tools to help managers measure everything from the costs of turning over each employee such as advertising the job, hiring, and training to the costs and ROI of the turnover reduction strategies such as reward and recognition programs. According to the IESP, organizations that measure their costs and ROI find the investment made to reduce turnover is typically much less than turnover cost.
You can download the white paper and calculators by visiting the IESP website.
Looking to make a new hire? Visit the new AMC Institute Talent Center today and take advantage our employer resources. Find guides, tips, and articles on how best to manage your hiring process. And, don’t forget to visit the AMC Institute job board – the only job board dedicated to helping the AMC industry find and secure talent. AMCs will benefit from flexible, affordable pricing options and messaging specific to active and passive job seekers. Enjoy intro pricing for a limited time only.
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