Partings between organizations and employees consist of retirements, deaths, interagency transfers, and resignations.

1. Employee Turnover
and Maximizing Staff
Retention
Prepared By : Karim Ragab
I Quit !

2. o Definition and types of staff turnover.
o How to Calculate it.
o Reasons for staff turnover.
o Costs to the business of this turnover.
o Maximizing staff retention in order to enhance business profitability.
Contents

3. Definition and types of staff turnover
What is Staff turnover ?
 Turnover is the act of replacing an employee
with a new employee.
 Partings between organizations and
employees consist of retirements, deaths,
interagency transfers, and resignations.
An organization’s turnover is measured as a percentage rate which is called,
Turnover Rate.
Turnover rate is the percentage of employees in a workforce that leave during
a certain period of time (fiscal year or calendar year).

4. Definition and types of staff turnover
There are 2 types of turnovers:
I. Voluntary:
when an employee self- willingly makes the
decision to leave the organization.
Voluntary turnover could be a result of a
• Better job offering.
• Staff conflict.
• Lack of opportunities in career advancement.

5. Definition and types of staff turnover
I. Involuntary:
When the employer makes the decision to
discharge an employee and the employee
willingly leaves his or her position.
Involuntary turnover could be a result of
• Poor performance
• Staff conflict.

6. Where:
o NELDY = Number of Employees who Left During the
Year.
o NEBY = Number of Employees at the Beginning of the
Year.
o NEEY = Number of Employees at the End of the Year
How to Calculate it.

7. Analyzing the Reasons for Staff Turnover
Staff turnover – disruptive, expensive and affects team morale
A study of 12,000 employees found that people will leave one company and
go to another for the following reasons:
1. Exciting work and challenges.
2. Career growth, learning and development.
3. Working with great people
4. Fair pay
5. Supportive management / good boss
6. Being recognized, valued and respected
7. Benefits
8. Meaningful work and making a difference
9. Pride in the organization, its mission and its products
10. Great work environment and culture
1. Love ‘Em or Lose ‘Em, Getting Good People to Stay, Kaye B, and Jordan-Evans S, Berrett-Koehler Publishers 2002, p.10

8. 11. Autonomy, creativity and sense of control.
12. Flexibility: work hours
13. Location
14. Job security and stability
15. Diverse, changing work assignments
16. Fun on the job
17. Being part of a team
18. Responsibility
19. Loyalty, commitment to the organization or coworkers
20. Inspiring leadership
Even if employees are paid well above the market rate they will still
leave if they are not enhancing their skill set or if they don’t have the
social bonds to keep them in the workplace.
Analyzing the Reasons for Staff Turnover

9. Analyzing the Reasons for Staff Turnover
- The Exit Interview
The Exit interview is the best way of
ascertaining the reasons why
employees are leaving the company
A structured series of probing questions
that are specific to both the job and the
individual.
Rather than a quick ‘thanks for working
with us and all the best in the new job’
chat.
A properly managed exit interview will elicit useful information that can then
be used to assess the workplace and make improvements to prevent
additional resignations.

10. Exit interview questions include the following:
1. Is the job that you were doing what you expected following the information we
gave you during the interview?
2. What additional information should we be giving new employees regarding the
scope of the job that they are being interviewed for?
3. What were the best aspects of the job?
4. What aspects would you like to see improved?
5. Were you supported with a good induction and initial training?
6. What advice would you be giving to the next person in your role?
7. What types of candidates do you think are best suited to our culture?
8. If we were to rethink this role what other suggestions could you make?
Analyzing the Reasons for Staff Turnover
- The Exit Interview

11. Costs of Employee Turnover
A study found that the turnover cost for every employee who leaves
ranges from 90% to 200% of their annual salary. Highly skilled
professionals can cost up to 5 times their salary.
In assessing the cost of replacing an employee consideration needs to be given to:
 The business lost when the role is vacant
o The disruption to an existing smooth-functioning team when existing employees are
required to take up the departed employees workload
o Work put on hold until a replacement is found
o Lost customers and business opportunities because relationships have been severed
o Loss of shared knowledge
2. Abbot, De Cieri and Iverson, Costing Turnover: Implications for Work/Family Conflict at Management Level, University of Melbourne 1998 (cited in The Profitable
Practice, CCH Australia, 2002, p.258)

12.  Lost supplier relationships
 The gains made by competitors by employing your employees
 Lowered morale and productivity of existing employees
 The costs involved in hiring – advertising, agency fees, management time
involved in interviewing and selection testing
 The direct employment costs of the new hire – salaries, sign-on bonuses,
moving allowances, superannuation, workers compensation, payroll tax, office
furniture, IT equipment.
 The time it takes to train a new person
 The socialization of the new person into the group
Costs of Employee Turnover

13. • It is a useful exercise to calculate these costs for your particular business. You will
be aware of the significance of the role that is vacant, the business that you are
losing and the disruption that the vacancy is causing.
• These costs can be considerable and can be many millions of dollars when
significant accounts go to competitors.
• Consider how much money your organization would save by reducing turnover and
how more effectively your organization could use the dollars associated with
recruiting and training new employees e.g.. employee development and enrichment
programs.
Costs of Employee Turnover
Cost of Turnover Calculator

14. There are many implications when someone leaves an organization, but consider
the following scenarios:
• When a Product Manager leaves supplier relationships are lost, the new Product
Manager doesn’t have the personal chemistry to work effectively with the advertising
people; is unfamiliar with the marketing mix and overall brand strategy so therefore
competitive opportunities are lost.
• When a Senior Manager leaves there is a loss of high level networks with key
decision makers therefore business takes longer and can be more costly (the best
deals cannot be negotiated because the personal relationships are not there)
• When a Procurement Representative leaves territories are vacant and the
engineers are receiving the vendors messages, therefore losing time.
• When the Receptionist leaves the phone doesn’t get answered resulting in lost
business; or an inexperienced receptionist cannot identify key callers or visitors
resulting in a decrease in customer service and lost business.
Costs of Employee Turnover

15. Maximizing Staff Retention
Maximizing staff retention saves the
company money
o There are a range of initiatives to minimize
turnover and it starts with the interview
process.
o Candidates become attracted to the vacancy
because they have seen the advertising and
have heard positive reports about the company
in the marketplace.
o Creating and nurturing these positive thoughts
within the candidate marketplace, and thus
increasing the pool of candidates available for
interview, are central to a company’s
Recruitment Brand Management strategy.

16. Maximizing Staff Retention –
The Recruitment Brand Campaign
When devising a Recruitment Brand campaign the following
questions should be asked:
• What impressions do the candidates have of our company?
• What types of people suit our organizational culture?
• What is the personality of our department?
• What are the key benefits of working for the company?
• How will these benefits be communicated?
Answers to these questions then drive the advertising strategy from the text of the ad
through to the entire feel of the campaign in order to communicate the right messages to
the right audiences.
Very few companies invest in recruitment brand campaigns to differentiate their offerings to
the candidate marketplace. Those that do have a larger candidate pool from which to
choose.

17. Maximizing Staff Retention –
The Interview Process
The initial interview is an important aspect of the candidate’s introduction to the
company, however many managers treat this interview too casually.
Behaviorally based interviewing is the strongest technique to assess a
candidate’s suitability for a particular role.
The premise here is that past behavior and performance is the best predictor of
future performance.
This can be achieved by asking candidates:
• Prepared questions.
• Understanding what the candidate is capable of doing.
• Understanding what the candidate wants to do.

18. o During the structured interview interviewers want to find out:
• How the candidates have handled various situations
• What they did
• The results of those actions
o In order to uncover the true nature of the candidate’s knowledge, motivation and
values.
o With this insight an assessment can be made in terms of the candidate’s
organizational fit.
o If the candidate is the wrong person to add to your existing group they won’t form the
necessary informal networks to share knowledge and enhance group productivity
and turnover will be an issue.
Maximizing Staff Retention –
The Interview Process

19. o To augment the interview process a number of employment tests can be used
including:
a. IT and Office skills.
b. Role plays.
c. Writing tests.
d. Presentations.
e. Analysis of clinical papers.
f. Psychological tests.
g. Sales aptitude tests.
h. Management and leadership assessments.
o These tests can be invaluable in reducing turnover because the employer can gain
an accurate understanding of the candidate’s skill set so there is no
misunderstanding once they have joined the company.
Maximizing Staff Retention –
The Interview Process

20. o To decrease turnover it is necessary to ensure that the candidates have a good
experience throughout the entire interview process. How they see the company in
the future will depend on how they remember their first experiences.
With successful candidates it is advised to:
• Move them quickly through the interview process (good candidates have high
expectations of quality and service and don’t favorably view delays.)
• To take time to clarify expectations so there is no misunderstanding of what the
role involves.
• To excite the candidates but not to oversell the job.
• To stay close to the candidates throughout the process continuing to probe for
attitude, motivation and organizational fit.
Maximizing Staff Retention –
The Interview Process

21. Maximizing Staff Retention –
Induction and Socialization
o Once employed, new recruits should have a good induction and socialization
experience.
o This involves:
• Meeting with other employees
• Understanding the structure of the company, what the different employees are
responsible for, and how they are expected to interact with employees in other
departments.
• Who to go to for help.
• How to use the office IT and telephone systems.
• Training in procedures and processes.

22. o During this period employees will also learn how to socially adapt to their new
workplace. They will need to understand the social norms of acceptable behavior
and the unwritten rules for interaction.
o Without this knowledge they may make social mistakes that will affect their smooth
introduction.
o The new employees then identify with the new company and build productive
relationships with their management, peer group and subordinates.
Maximizing Staff Retention –
Induction and Socialization

23. Maximizing Staff Retention –
Throughout the employment relationship
o After the new employee has joined there are a range of initiatives that a manager
can do to retain their staff including:
• Ensuring that their jobs are interesting.
• Their career goals are supported.
• Information is shared with them.
• They are connected with others in the organization.
• That they are respected and valued.

24. Make their jobs interesting
o Employees need opportunities for personal challenge and growth. If good workers
find out that they are no longer receiving these necessities then they may decide
that they have outgrown the company and consider leaving. The simplest way to
enrich jobs for individuals is to ask them questions such as:
• What skills do you have that you are currently not using?
• In what areas would you like increased responsibility?
• In what ways would you like your job changed?
o Managers therefore need to focus on job enrichment for their employees if they
wish to retain their services.
o A major cause of turnover is workplace boredom. Job enrichment is not difficult, but
it does require staying alert to opportunities for all your employees and working with
them to enrich their jobs.
Maximizing Staff Retention –
Throughout the employment relationship

25. Support their career goals
o Discuss your employee’s futures, openly and frequently. Involve them as you discuss
their abilities, choices and ideas.
o Employee’s don’t expect all the answers, but they do want you to listen to them and
to offer your perspective.
o
o They will also benefit from specific feedback with examples of their performance and
how it relates to their future goals.
o Take time out to have in-depth discussions with them about how the industry is
changing over the next 2-5 years and what skills they will need to compete for roles
in the new environment.
o For instance, should they be completing further business studies, a qualification in
health economics, gaining exposure to new therapeutic areas or undertaking
overseas assignments.
Maximizing Staff Retention –
Throughout the employment relationship

26. Share information with them
o Make your employees feel part of the organization by telling them what is happening.
o Information sharing is important at all times but critical during periods of change
(downsizing, mergers and acquisitions).
o If employees are worried about events and don’t have sufficient information
they are likely to worry about their job security and update their resumes.
o Managers must give information as early and as honestly as possible and this will
make employees feel important and valued. These employees are likely to have
insight into the specific problems and may be able to offer solutions.
Maximizing Staff Retention –
Throughout the employment relationship

27. Share information with them
o The role of the manager is also to help employees look into the future, by providing
information that helps the employee’s development and career advancement.
o Employees want to know about the company’s direction and goals, the industry’s
future and the emerging trends that may affect career possibilities. Employees with
this information will feel more confident in their future within the company.
Maximizing Staff Retention –
Throughout the employment relationship

28. Get them connected
o Employees need groups of colleagues who can support them, offer information or
help, or just listen to them.
o Connections are a major reason why people stay with a company. Managers need to
give attention to strengthening the bonds between people in their team and others
within the organization.
o Employees need to link with others to get their jobs done effectively. Managers need
to be asking their staff “who else in the company do you need to be liaising with to
optimize your role?”
o Relationships with others will help employees get their work done and will give them
insights to enhance their productivity. As employees are linked to other functions
within the company their knowledge and skills will grow and they are more likely to
stay.
Maximizing Staff Retention –
Throughout the employment relationship

29. Respect them
Even if employees are well paid and have
opportunities to learn and grow, if they
don’t like their bosses or co-workers they
will leave.
Maximizing Staff Retention –
Throughout the employment relationship

30. Thank You