Control Staff Turnover


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When staff leave, this turnover can have a negative impact on your business. This is especially the case if those leaving either are key to its success and continuity or do so because they think you have treated them unfairly, which could result in tribunal claims.

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Control Staff Turnover

  1. 1. Control staff turnover Table of contents Control staff turnover 2 Introduction 2 Factors affecting staff turnover 2 Monitoring staff turnover 3 The cost of staff turnover 4 Managing staff turnover 5 Developing and maintaining skills 5 Checklist: controlling staff turnover 6 Here's how improving procedures helped us manage staff turnover 6 Helplines 8 Related guides on 8 Related web sites you might find useful 8 Created by Business Link on 17 September 2009 09:47 You can personalise content from the Business Link website and download it in PDF format. This is a free service Control staff turnover | Created by Business Link on 17 September 2009 09:47 è Crown copyright 2007 Page 1
  2. 2. Control staff turnover Subjects covered in this guide Introduction Introduction When staff leave, this turnover can have a Factors affecting staff turnover negative impact on your business. This is especially the case if those leaving either Monitoring staff turnover are key to its success and continuity or do so because they think you have treated The cost of staff turnover them unfairly, which could result in tribunal claims. Managing staff turnover Developing and maintaining skills Therefore, retaining staff and treating them fairly has benefits for your business. Checklist: controlling staff turnover Continuity and stability become part of your business' culture, and staff feel they belong Here's how improving procedures helped us to the organisation and take pride in their manage staff turnover work. Skills and competencies are maintained in key business areas and Helplines productivity is often increased. Related guides on Staff turnover is a business risk, but you can Related web sites you might find useful minimise the ways in which it affects your business through a structured staff management programme. This guide will help you manage staff You can find this guide by navigating to: turnover by providing examples of what makes staff leave and a checklist of Home > Employing people > Motivation > measures to help staff retention. There is Control staff turnover also guidance on how to measure and benchmark turnover and how to improve the management of leavers. Factors affecting staff turnover Pay is rarely the only reason why people leave, although low pay levels are often a disincentive to stay. When you run a business it is good to be aware of factors that commonly affect staff turnover rates, so that you can take steps to reduce them. Consider how your business scores in the following areas. Control staff turnover | Created by Business Link on 17 September 2009 09:47 è Crown copyright 2007 Page 2
  3. 3. Control staff turnover common goals and discourage Recruitment and induction unhealthy individual rivalries? • Making the right choice - are you getting the staff selection process Contracts, pay and working environment right? Do you encourage staff to recommend friends and • Contracts - do the terms and acquaintances for job vacancies? conditions of your contracts • Induction - how do you welcome encourage staff loyalty? and orientate new staff? How do you • Competitive pay rates and a fair, let them know where things are and transparent pay system - are they what they and their colleagues are in line with your industry? supposed to do? See our guide on • Incentives and other staff benefits - getting new workers started. are they relevant for your staff? Can • Flexible working arrangements - staff choose the ones they need? do you recognise your employees' • The office environment - is the changing needs to achieve work-life physical office environment pleasant balance? Use our interactive tool and well designed? Are noise, light to investigate what kind of flexible and ventilation levels acceptable? working will best suit your employees and you. Monitoring staff turnover Training and staff development Regular monitoring of staff turnover can • Motivation - how supportive and show you why it is happening, and enable encouraging is your business? you to control and forecast it. • Organisational culture - what are you doing to promote an inclusive culture in which staff are aware of Measuring and benchmarking turnover and committed to the business' Your current staff turnover should be aims? measured in percentage terms and should • Matching jobs to people - are you follow this simple two step process: making the best use of skills, experience and competencies, and helping staff fulfil their aspirations? 1. Add together the number of staff • Staff training and development - working at the beginning of the time are you investing in your staff by period and the number of staff giving them time and opportunities to working at the end of the period and learn new skills? divide by two. This will give you your • Formal appraisals - how often do average number of staff working you give your staff the opportunity to within this time period - you will need discuss their performance? this number for the next stage. • Effective grievance procedure - do 2. Work out the number of leavers over staff know how to register a the time period, multiply by 100 and grievance and are they making use then divide by the average number of of the procedure? people working in that same period. • Team working - do you encourage Control staff turnover | Created by Business Link on 17 September 2009 09:47 è Crown copyright 2007 Page 3
  4. 4. Control staff turnover This formula will give you a percentage rate staff leaving. The obvious ones are time and for your business that you can compare over money but there are also hidden costs as time. You can also use this indicator to see well. how your business compares with averages in your industry. This is known as The monetary and time costs of staff benchmarking. turnover Examining the causes of turnover When a member of staff leaves, there may be costs associated with: To make a meaningful assessment of your current business' position, try to identify the • leaver administration tasks, eg exit causes of turnover: interviews and payroll changes • covering a vacancy until it's filled, eg • It is often effective to have through the use of temporary staff or consultations with individuals or overtime payments groups of staff to root out any • advertising for a replacement or underlying problems and causes of using a recruitment agency dissatisfaction. • dealing with recruitment and • Exit interviews are carried out by selection tasks, eg checking many businesses and can reveal applications, and organising and common reasons for people leaving, attending interviews and highlight any emerging patterns. • the induction and training of the See our guide on when an successful applicant employee resigns. • Surveys of all staff can often The hidden costs of staff turnover indicate general satisfaction levels but remember to address any issues When a member of staff leaves, you may arising so that they know you take experience: their views seriously. • Analyse your recruitment and • other staff expressing a wish to leave selection procedures to see if you • higher levels of stress-related can identify expectations or potential absence problems earlier - alternatively you • interruptions to workflow and missed may need to make the business' deadlines expectations clearer at the • a reduction in productivity or levels of recruitment stage. customer service • a drop in staff morale, particularly if Get guidance on staff turnover and the leaver was popular and good at absence on the Acas website - Opens in their job, and/or you need the a new window. remaining staff to take on their work in their absence The cost of staff turnover Rising employee turnover often develops into a 'vicious circle' as low morale causes There are a number of costs associated with more workers to leave, which in turn Control staff turnover | Created by Business Link on 17 September 2009 09:47 è Crown copyright 2007 Page 4
  5. 5. Control staff turnover reduces the morale of those who remain, You may want to consider different and so on. incentives for retaining those staff with the key skills and attributes important to your business. These may include: Managing staff turnover • individual or team productivity Reducing staff turnover helps to minimise bonuses the costs and negative impact of unwanted • performance-related pay and unplanned resignations. You can help • non-financial incentives, eg limit turnover via staff consultation, healthcare provision, flexible working succession planning, performance • attractive pension arrangements management and staff incentivisation. Consulting staff and succession See our guide on how to implement staff incentive schemes. planning You can be proactive about some things and prepared for others. Consider the Developing and maintaining skills following measures: There is a strong business case for developing your staff as it will help ensure • employee consultation - consult that your business runs smoothly and with regularly with staff about general consistently good results. You should also morale and how satisfied they are be able to reduce staff turnover by training with their work and working your leaders to motivate staff. conditions - see our guide on how to inform and consult your Training and development employees • succession planning - put together While helping staff develop their existing and regularly review your plans for skills and learn new ones can cost your covering and replacing leavers, and business time and money, training and training and inducting new starters - development is crucial to improving your see our guide on getting new business' performance and can actually help workers started prevent excessive turnover. Managing performance This is especially the case if your staff see People are likely to want to work for you if that what they are learning is relevant to your business has a reputation for treating them and the business, and they can readily staff fairly and provides support, put their new knowledge into practice. development and motivation. Ensure your staff receive regular feedback on their It's important that your training and performance - see our guide on how to use development policy is fair and clearly appraisals to manage performance. understood by your staff as early as possible in their employment. If they know Incentivising key staff that you will spend time training and Control staff turnover | Created by Business Link on 17 September 2009 09:47 è Crown copyright 2007 Page 5
  6. 6. Control staff turnover developing them, they are more likely to leavers if you understand why people leave, continue working for you. See our guide on and if you structure a programme to manage how to set up employment policies for staff effectively from the time they are your business. recruited. Make sure you: Training and development can be delivered • keep records of leavers by experienced workers through on-the-job • find out why people leave through training or from external sources such as exit interviews and consultation training organisations or consultants. See • monitor your rate of turnover at our guide on how to fit the training to your regular intervals needs. • benchmark your staff turnover • address issues facing new joiners Leadership and people management and long-term workers • analyse your business culture The culture in your business can influence • refine your recruitment and retention of staff, and is often defined selection process through leadership. You can foster • review and benchmark your pay and leadership skills in your staff that will benefits policy promote a culture they want to belong to. • assess your training, development and promotion policy People who feel good about their • refine your appraisal process and development and contribution to the management of individual/team business are likely to reflect this in the way performance they help drive the business forward, and • review your work-life balance develop other workers. arrangements - are your workers able to manage both their home and work commitments? Finally, remember that good people • assess the management style of management helps keep good staff. A poor your business relationship with a manager - who may be • formulate contingency plans for skilled in other areas - is one of the main coping with leavers reasons why workers decide to leave. • create and regularly review Therefore, you may want to train your succession plans managers to coach and supervise other • examine your staff and your people. managers' leadership styles Checklist: controlling staff turnover Here's how improving procedures Staff turnover can help introduce fresh ideas helped us manage staff turnover and skills into your business, but too high a level of turnover can damage its Sue Shuttleworth performance. Shuttleworth Veterinary Group - Opens in a new window You will be better prepared for dealing with Sue's top tips: Control staff turnover | Created by Business Link on 17 September 2009 09:47 è Crown copyright 2007 Page 6
  7. 7. Control staff turnover • "Monitor staff turnover, but don't procedures needed to be formalised and panic every time someone leaves - a there were gaps to be filled. We began with certain level of turnover is normal a staff questionnaire, which we've continued and healthy." to issue every six months. This helped us to • "Invest in a structured training and identify areas where we could be doing development programme." more to retain staff. • "Involve everyone in your vision for the company." "Among other measures taken, we introduced weekly staff meetings and a Shuttleworth Veterinary Group has been monthly newsletter, implemented a rolling established in Rossendale, Lancashire for training programme and began conducting over 20 years. Two years ago, practice formal exit interviews. We also refined our owner Sue Shuttleworth piloted the recruitment process to ensure a better 'fit' Investors in People (IiP) Work-life Balance among candidates. After all, one of the keys Model (WLB), resulting in overhauled to managing staff turnover is to employ the procedures and a revised management right people in the first place." style. One of the benefits has been improved motivation and retention among Involve staff the practice's 20 employees. "Consulting and informing staff about new What I did procedures has made them feel part of the business in a way they didn't before. We've also trained line managers to communicate See the big picture policy and procedural changes so the right "High staff turnover can be a feature of messages filter down from the top and many veterinary practices and ours was no everyone feels involved. exception. There's no single thing that makes staff stay or go, you have to look at "Overall, there has been a change in the the bigger picture and go through the company culture, with greater emphasis on business from the top down. That's what IiP team working and a no-blame philosophy and WLB made us do. that's encouraged a more proactive approach to problem solving. We've found "We started by involving the team in that trusting people and giving them control redefining the mission and vision for the over their work can be a powerful motivator business, which included a strong emphasis and reason to stay." on improving work-life balance - a big issue in our profession, as the hours can be What I'd do differently unsociable. We then evaluated our current procedures in areas like recruitment, exit Seek input sooner interviews, training and team working." "We've spent a lot of time communicating Implement new procedures our mission and values to staff at all levels, but I wish we'd sought their input right from "We recognised that although we were the beginning." already doing many of the right things, Control staff turnover | Created by Business Link on 17 September 2009 09:47 è Crown copyright 2007 Page 7
  8. 8. Control staff turnover Be patient Related web sites you might find "We didn't realise how long it takes to truly change a company's culture and useful management style. It took around 18 Managing attendance and employee months before we saw the maximum benefit turnover guidance on the Acas website - from the policies and procedures we'd put in Opens in a new window place." Staff motivation online courses on the Helplines learndirect business website - Opens in a new window Acas Helpline 08457 47 47 47 Employee retention and turnover on the Chartered Institute of Personnel and Development website - Opens in a new window Related guides on Managing attendance and employee turnover guidance on the Acas website - Use our interactive tool to investigate Opens in a new window what kind of flexible working will best suit your employees and you | Getting Leadership online course on the new workers started | Set the right pay learndirect website - Opens in a new rates | The employment contract | window Flexible working - the law and best practice | Meet the need for work-life balance | Implement staff incentive schemes | Fit the training to your needs | Use appraisals to manage performance | Recruiting and interviewing | Workers leaving: the basics | When an employee resigns | Inform and consult your employees | Manage absence and sickness | How to deal with stress | Set up employment policies for your business | Improve the performance of your staff | Skills and training for directors and owners | Develop your management team | Evaluate your training | Here's how asking employees for ideas improved our business | Here's how a staff incentive scheme improved our business | Control staff turnover | Created by Business Link on 17 September 2009 09:47 è Crown copyright 2007 Page 8