Retention and Turnover Infographic
Retention and Turnover in the Workplace
Results of a recent large-scale, global study by Blessing White, global consulting firm specializing in employee engagement, suggests that voluntary turnover is on the rise. Compared to the responses from their 2008 survey, in 2011 more respondents reported that they were looking for new career opportunities.
Only 56% of North Americans report they would definitely remain with their current organization during the next 12 months.
13% of those remaining, 13%, compared to 7% in 2008, reported “No Way!”.
Pricewaterhouse Coopers’ annual report showed that voluntary turnover in the U.S. is starting to rise following the recession. Voluntary turnover reached a low point of 7% in 2010.
Direct costs associated with turnover
There are various estimates of the costs of hiring and training new employees, ranging from 25% to five times the annual salary for the position.
Dr. Bill Pinkovitz and colleagues of the University of Wisconsin-Extension, conducted interviews with 78 companies that employ approximately 12,000 people. Based on the interviews, they identified four major areas of cost associated with turnover:
-
- Separation Costs
When employees separate from organizations, there are a number costs involved, including: processing paperwork, separation or severance pay, or unemployment benefits.
-
- Vacancy Costs
Vacancy costs include costs associated with covering work shifts and responsibilities while new employees are recruited and trained.
-
- Replacement Costs
Recruiting new employees can be costly. Advertising on recruitment platforms, interviewing potential applicants, paying for employee selection tests, medical examination, moving expenses, and the time and human resources needed to perform these activities are expensive
-
- Training Costs
These include the direct and indirect costs associated with training new employees.
Indirect costs associated with turnover
A study conducted on 262 Burger King restaurants investigated the impact of turnover on sales and profit. They found that turnover decreases sales and profit, in part, because turnover decreases efficiency.
The researchers studied the restaurants over the course of 2 years. They measured customer wait time using data reported by mystery shoppers. They measured customer wait time using data reported by mystery shoppers, and they tracked profit and monthly sales.
Perhaps, they should try to build a conversational sales strategy that’s equal parts memorable as it is useful.
In this study, customer wait time was a significant predictor of sales and profit. Management turnover was associated with higher customer wait times, as was staff turnover.
When turnover is high, employees are less efficient.
Proven methods for increasing retention
Career Development Programs
Companies can introduce career development programs. Studies show that when employees see opportunities to advance within their current company, they are more likely to be satisfied and to remain with the organization.
Culture
Research also suggests that culture plays a key role in reducing turnover. In the study, they were able to predict turnover fairly accurately in management-level employees. Specifically, the findings suggest that by reducing the prevalence of politics and increasing organizational support, organizations could retain employees at a higher rate.
Engagement
Increasing states like engagement may have more sustained effects. Employees who are engaged stay with their organizations because of what they give and do. Employee engagement is associated with the degree of fit between the employee and his or her job.
Fit
Person-job fit predicts three key employee attitudinal outcomes job satisfaction, organizational commitment, and intentions to quit. Similarly, it showed that person-organization fit has a strong impact on job satisfaction and organizational commitment.
Motivational factors for employees
42% of Canadians and Americans view work as Very Important in their lives, with only 16% reporting that it is Not Important.
Studies suggest that employee personality and motivational factors may provide insight into the degree to which they will experience a strong fit with a position.
Two personality characteristics appear to be best predictors of retention in this job: empathy and ego drive. Specifically, they found that salespersons were most effective when they could demonstrate empathy. Ego drive was a sense of high motivation to make a sale.
Employees’ Top Choice when looking for a job
- 36.6% Doing an important job
- 28.1% A good income
- 21% A safe job with no risks
- 13.7% Working with people you like
- 4% Don’t know
Similarly, a large-scale, longitudinal study conducted by Duffy and Sedlacek of young adults showed that the number of individuals identifying themselves as having “intrinsic” work motivations is often similar to or higher than those reporting an orientation towards “extrinsic” motivations.
Companies and organizations can improve fit and increase retention by applying employee selection techniques that account for competencies, personality, and motivation.
How to find employees who fit
ClearFit’s patented Success Prediction Process instantly analyzes personality and motivation traits as well as skills and experience to spot the candidates that have the best chance of success in a job.
Research over the past 25 years has demonstrated the relationships between the personality attributes measured by ClearFit and successful performance in a wide range of jobs.
ClearFit increases retention by finding employees who fit.
Find out more at www.clearfit.com .
Embed This Image On Your Site (copy code below):
