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Here Today, Here Tomorrow
Transforming Your Workforce from High-Turnover
to High-Retention
by Gregory P. Smith
reviewed by Freda Turner Ph.D.
If managers want to see an increase in productivity and a positive impact
on the bottom line, then focus on retention, says Gregory Smith, consultant
and President of Chart Your Course International. Depending on the industry,
turnover rates vary from 300% (fast food industry) to an organization like
SAS with a turnover that has never exceeded 5 percent in its 20 years of existence.
Low-employee turnover allows an organization to focus on revenues and productivity.
Smith's research reflects that at a minimum, it costs $4-$7K to replace
an hourly worker and up to $40K to replace a midlevel, salaried employee.
The costs associated with turnover may include lost customers, lost business,
damaged morale, and then the hard costs of time spent in screening, verifying
credentials, references, interviewing, hiring and training the new employee
just to get back to where you started. This expenditure of time and money
does nothing to give a manager or an organization a competitive edge.
However, despite these known costs and loss of productivity, Development
Dimensions International reports that 54 percent of businesses do nothing
to create a high-retention culture or reduce high employee turnover. The revolving
door keeps moving - employees leave, managers interview and hire more workers
allowing competitors with low turnover to focus more on productivity.
Smith's book provides eight elements that high-retention organizations have
in common.
1. Purpose.
People want to be part of an organization that stands for something that provides
them with personal fulfillment and meaning. Singapore International Airlines
(SIA) prides itself on customer service. They improved retention ratios by
placing more time and effort in the selection and training of employees and
aligned the training to support the organization's mission/goal of providing
excellent customer service. Today when customers are happy, they express their
appreciation to SIA employees who are proud of being on the SIA team. Smith
provides dozens of suggestions from high-retention organizations to create
a meaningful work environment where employees are proud, happy, and more productive.
2. Caring management.
Smith uses a General Ulysses S. Grant's quote, "There are no bad soldiers,
only bad leaders" to remind readers that poor leaders and managers can be
a problem and on-going leadership development is critical. He shares a number
of leadership development strategies used by low-turnover organizations. How
can a manager or leader create the type of environment where employees would
come to work even if they were not paid?
3. Work schedules and benefits that allow work/life balance.
The downsized, super competitive work environment of today often forces employees
to put their families in a secondary position. The Randstad North American
Employee Review recently found in a survey that only 34 percent of American
employees now want a traditional full-time job. Smith provides methods used
by high-retention organizations in meeting employees' expectations, reducing
employee turnover rates, and increased productivity/loyalty.
4. Honest, updated information and communication.
In 1995, the Boeing Company suffered its second-longest walkout ever when
the Machinists Union led a 69-day strike. Boeing lost hundreds of millions
of dollars and experienced significant customer service headaches when they
missed the delivery dates on 36 planes. Boeing's President, Frank Shrontz,
later acknowledged the strike was a result of management's failure to communicate
with the workforce about their concerns. UPS provides another example where
they lost over $700 million in revenues and lost customer trust when UPS failed
to communicate with their workforce. No one wins in these situations and Smith
shares strategies used by high-retention organizations to prevent miscommunications.
5. People want to enjoy their work environment.
Some work is simply routine but Smith's findings suggest providing employees
something to talk about - future goals they can conquer or results that have
been achieved. Sports teams keep players motivated this way. Often organizational
bureaucracy kills the spirit and ideas of employees who want to contribute.
Smith offers best practices that can charge the spirit within organizations.
6. Performance management.
Numerous suggestions are provided on ways to improve employee performance
and productivity. He illustrates methods that have been successful in motivating
migrant workers as well as senior executives.
7. Rewards and recognition.
All humans need to feel appreciated and in a survey conducted by Robert Half
International, the results showed that recognition and praise was the number
one reason employees stay in their work environment with fair compensation
being secondary. Smith's book provides low-cost, easy to implement "fair"
recognition programs that keep people focused and heading in the right direction.
8. Employees migrate to training and career development
opportunities.
If employees are blocked into a specific or dead end job with no opportunity
for promotion or variety, they will leave - especially Gen X and Gen Y workers.
An ASTD study showed that leading-edge companies trained 86 percent of the
employees whereas average companies trained only 74 percent. Companies that
invest in workplace learning yielded higher net sales per employee and higher
gross profits per employees. Smith suggests holding HR and training departments
responsible for results and provides numerous suggestions an organization
can take to ramp up their learning culture.
This book provides numerous suggestions on ways to turn an average organization
into a highly productive, low-turnover environment where managers can focus
on productivity - not recruiting and replacing an endless stream of workers.
This book is a must read for all managers, coaches and HR personnel interested
in strategic growth and higher productivity.
Freda Turner, Ph.D. is a researcher of best business practices and is affiliated
with the Doctoral and Graduate Studies programs at University of Phoenix and
Embry Riddle Aeronautical University. She may be reached at fturner@email.uophx.edu.
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Here Today, Here
Tomorrow
Transforming Your Workforce from High-Turnover to High-Retention
by Gregory P. Smith
Dearborn Trade Publishing, Chicago, Illinois Published 2001
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