Equifax states that 40% of all employee turnover happens in the first six months. Another 16% happens in the next six months. Therefore 56% of all turnover happens in the first year. Imagine the amount of time and money being spent to recruit, hire and train 56% of your employees who will not be with you in a year.
There are two types of turnover:
- INVOLUNTARY: The employee is ASKED TO LEAVE
- VOLUNTARY: The EMPLOYEE LEAVES for many reasons
There is also "Early Turnover" which occurs in the first 6 months of hire. Early turnover can be either involuntary or voluntary. Early turnover is weak processes driven.
People Profits Principle #84
Turnover is focused in the first six months
and can be the easiest to solve
The causes of early turnover are infinite but fixable. The most prominent of the causes are:
1. Poor candidate selection by the employer
2. Poor organizational selection by the employee
3. Misunderstandings by both the employee and employer
4. Weak on boarding by the employer
5. Lack of engagement opportunities
Unfortunately the list goes on and on and varies by organization. Many employers try to recruit their way out of their turnover problem. They spend a ton of time and money proving that they cannot succeed without fixing their turnover problem first.
There are many strategies and processes that are available for reducing your Early Turnover. Here are the main five:
1. Identify who you are as an employer and your target employees.
2. Develop a selection process which helps you and the candidate make the right decision
3. Over communicate to limit the chance of misunderstandings. What misunderstandings have happened IN THE PAST? Create a process to drive the communication to a level which insures success.
4. Develop an on boarding process consistent over time and department. The process has many pieces but it drives engagement.
5. Constantly realign based on results.
The cost is minimal and the savings in time and money will be amazing!!
People Profits case study: A manufacturing company reduced its' turnover by 42% in three years at a cost savings of $1.2 million a year. The cost of the strategies were minimal and included the strategies outlined above and others. The strategies will differ with each organization, industry, culture, goals and employee demographics. Once the strategies were in place - they were realigned as results became apparent.
People Profits mission is to elevate your HR department to where you need them to be. The strategic driver of your greatest asset!! We do this by building a comprehensive Human Capital Strategy and Plan including all 7 elements of HR with no conflicts and focused on business and financial principles.
Profits and Growth through Human Capital Strategy and Systems
See HR differently
Clark Ingram, MBA, SPHR, CEBS, CPCU is the principal of People Profits, www.PeopleProfits.com ©2015 People Profits, LLC
#strategy #employeeturnover #profit
