Employee turnover is a costly disease that goes undetected in many firms. Most CEOs just accept it as part of the cost of doing business. But, successful CEOs recognize the cost of, understand the reasons for, and find ways to lower turnover as much as possible. Let's consider the cost of just losing one person. Imagine that this person is a good employee, not great, just good. They get their job done with a minimal amount of fuss and bother. They make around $30,000 a year and receive another 25% in benefits. So, their total cost to the firm is $37,500 per year.

Let's assume they leave and you have to find a replacement. Then, the other members of your staff have to pick up the slack but they are busy so things are not done quite as well as they should be. During this time, it is easy for something important to be overlooked and left undone that could cost you later.

You run an ad looking for a replacement and begin the interviewing process. After a month or two, a candidate is finally selected and begins to learn the job. In six months or so, they can do the work at the same level of the old employee. What is the cost associated with this? In the past, low-level employee departures could cost up to 25% of their annual salary with professionals costing up to 1.5 times their salary. Today, it could be at least 50% up to twice the annual salary.

Do the following to calculate what your turnover is and the cost of this turnover last year:

- Determine how many people you employed on average for the year.

- Determine how many people left your employment last year.

- Divide the average employment number for the year into the number of the employees who left and you have your annual turnover. If you want to know a monthly number divide by 12.

- Divide last year's payroll by the average number of employees to determine the average annual salary.

- Multiply the average annual salary by the number of employees who left.

- Multiple that number by .35 (we'll be conservative) and you likely have about what turnover cost you last year.

This does not include what we like to call the 'cost of lost opportunity'. This is what the existing employee may have done to improve your company since they know it better than the new employee. It may take the new hire several years to get to the same level of knowledge as the one you lost.

An organization can only be as good as its people. Having the right people in the right job is what sets one company apart from its competitors in the marketplace. In the book, Good to Great, Jim Collins says great companies have a knack of putting the right people on the bus and, then once on board, into the right seats. Do you?

This sounds easy but anyone in business knows that it is not. That is where we can help you by utilizing our expertise. A validation study of a convenience store chain that used our methods showed it had an 89.3% reduction in monthly turnover, saving from $42,417.50 to $92,686.25 per month! It went from 172% turnover to just 19% in 18 short months!

A large metropolitan hospital reduced it's critical nursing turnover from 65% to 15% in just 18 months using our methods.


Article Source: http://EzineArticles.com/?expert=John_Beane

One of the easiest methods for improving your hiring process is by introducing a process called targeted selection into the interview. This is a very simple way of getting people to tell you what they would do in specific situations.

The result is they tell you what they have done in the past. All of us tend to repeat what we've done before unless someone intervenes to help us change our behaviors. So if we know what they've done before we can fairly accurately predict what they will do in the future.

If our questions become specific, open-ended questions about various tasks or situations of the job we're hiring for then the candidates will do their best to tell us how they would act in that situation. Since they are on the spot they will tend to think of how they've acted in the past and reiterate that to you.

When developing your questions for a particular job you need a primary, secondary and tertiary question prepared in advance. Here is an example:

Primary - Tell me the worst mistake you've ever made as a case manager?

Secondary - "What was the impact to the firm and yourself?"

Tertiary - "How did you correct the error and what did you learn from the experience?"

Now your candidates will have to think about what you've asked and either refer to direct experience to answer or develop what they believe they would do if they haven't experienced the exact scenario you present to them.

For most jobs I feel somewhere between 25 and 50 primary skill or behavioral questions will be enough to get you through a one-hour interview. In seminars on this subject matter I have seen people run through 10 to 20 primary questions in less than 10 minutes, but they didn't have secondary or tertiary questions. They thought they had more than enough prior to starting.

I frequently talked about having a list of behaviors you feel are beneficial to your firm. Develop questions around those behaviors to determine how your candidates feel about these characteristics.

Here is an example:

Primary - Tell me about the way in which you worked with your direct reports/team members to develop new and creative ideas to solve business problems?

Secondary - Give me a specific example?

Listed below are possible targeted selection questions:
- On occasion, we all wish we could change how we interact with customers. Tell me about a recent interaction you wish you could change?
- Tell me about a time you had to work at a fast pace for a long period of time?
- What kind of work did you do?
- What did you do to maintain that pace?
- What approaches have you used in presenting to different audiences? Give me a specific example.
- Tell me about a time that you inspired someone to work hard to do a good job. How did you do that?
- Have you taken any steps to improve your skills or performance? Give me an example.
- We don't always work with people we consider ethical or honest. How do you feel about that?
- Tell me about a time you saw a fellow employee do something that you didn't think was appropriate.
- Tell me about a good decision you made and a decision that wasn't so good.
- What did you do differently in making those decisions?
- What is the greatest number of words you've ever typed?
- What software packages have you used in your job? Once they've told you ask very specific questions about how the software works to determine their proficiency.
- Tell me about a long or short-term plan you developed for your department.
- Describe a time you decided to take a risk that you latter regretted.




Article Source: http://EzineArticles.com/?expert=John_Beane

Many years ago, when managing a company with several dozen employees, I began to ask, "Why do my employees leave?' My first thought was to blame them. They wanted more money than I could pay, they didn't appreciate what I was offering, they wanted an easier job, etc.

But when I began looking at myself and how I ran my company, I began to realize it had little to do with them and far more to do with me. I did not hire the right person for the job and then I didn't provide the orientation and training they needed to be successful in the job. In other words, I had thrown a 'warm body' into the position and expected them to succeed.

So I began analyzing what a particular position would require a person to do in order to make them successful in the job and what sort of person could be happy with what I had to offer them. When I began this analysis, my annual turnover was generally in the neighborhood of 200%. At the time, I thought that was not bad since that seemed to be fairly typical of similar businesses around me.

But, as I began to change the method of hiring people and began to offer them something close to what they wanted, I made an amazing discovery. My turnover dropped to very low levels and my profits were increasing at an astounding rate. At the time, I did not know how to calculate what turnover was costing (for more information on the cost of turnover read my other article on calculating the cost of turnover) and, since my employees were mostly minimum wage, I didn't think it was much. Boy, was I wrong!!

In the years since, working as a consultant, I always recommend clients to look at turnover as a root cause for many of the problems facing them. There is one experience in my consulting career that really exemplifies this. I had a client that lost the ability to manufacture a quality product after it lost every employee who knew how to keep the process in control. None of the previous employees had passed their knowledge to the newer ones. This is hard to believe but, if an item with enough quality to be sold was produced, it was by accident. I know this is an extreme example but it illustrates what turnover can to do to an organization.

So, why do people leave a job and move on? For years, the answer has always been money or, at least, that's what managers thought. That is not right but it is an easy answer that takes responsibility off the manager. The burden has to be placed on the manager since they 'own' the jobs and have some degree of responsibility for filling the positions.

Over the years a lot of studies have been conducted on why people leave one job to take another. In all these studies, the reasons don't vary much but the importance varies, depending on the organization.

- Poor job fit: This is one of the most common reasons people leave. They are dissatisfied with their current employment because they are not well suited to the requirements of the job. (Example: Jane has strong courage and direction so she works best if she can determine goals and how to achieve those goals by herself. But, in her present job, she is expected to share the decision making with a group of people which is frustrating to her.) If a person does not fit the job, they can become so dissatisfied and unhappy that they focus on just finding another job instead of finding another job that fits their needs. We do a disservice to that person when we hire them.

I was consulting with an insurance office when they were considering a new hire who was working for another insurance company at the time. When asked why she wanted to leave her present employer, she said she did not like a team environment. She was informed that this office was about to institute teams but she said that she didn't care she needed the job.

Would it have made sense to hire her? Not really, since she would be leaving one job environment in which she was not satisfied to go to a similar one.

This makes it imperative that the person responsible for hiring understands what is needed in an employee to make them happy and successful in a particular position. This ensures that the right person is placed in the right job.

- Too little feedback on performance: Most of us need to know how we are doing in our job. If we don't get any feedback, we don't know how to change in order to improve our performance or even if we need to change. And, if we only get negative feedback, we know what we should not do but have no idea of what we need to do.

As a consultant, I use recurring clientele as a 'feedback loop'. If I do good work on one project, I will probably be considered for future ones. If I don't do well, then I won't be rehired. But, what about the employee who shows up day after day with little idea of how they are doing?

I recommend a monthly 'one on one' meeting so that the employee and his or her manager can discuss performance. The manager can praise the employee for what they are doing well and point out one thing they could improve upon. In the next meeting, the manager can give feedback on that issue. The manager also needs to ask the employee for feedback on how they are doing as manager and what they might do to improve their performance. This only takes a few minutes but can have a major return on the time invested.

This is beneficial to the employee for a couple of reasons. It makes them feel that they are part of the team and that they have some responsibility for helping the manager improve. It also lets them know that the manager is aware of what they do. If you look at studies done on why employees leave, the first two things just discussed will resolve most of the turnover issues.

- Little career opportunity: This is the single most difficult issue for small organizations. Where does a person go if they leave their job? Too many managers want to keep good employees in their current role since the manager's success hinges upon getting the work done. But, this is short sighted for several reasons.

For one thing, some people get tired and bored if they do the same thing year in and year out. Great employees lose their edge and become average if they aren't given new challenges. Average employees become so good at doing their work they lose their motivation and become below average performers. Boredom with one's work is deadly to employees.

When a new employee comes on board, a good manager lets them know the various paths that may be open to them and what they need to do in order to grow within the organization. This allows the new employee to decide upon the path they wish to take and to determine what they need to do to get there. And, now their manager can mentor them for growth rather than trying to push them.

In the book, Good to Great, Jim Collins states that the single most important issue to any organization wanting greatness is to have the right people on the bus. And, more importantly, once they are on the bus, they must be in the right seat. A good manager makes certain they get the right people in the organization and then helps them find the right seat.

By doing this, an environment is created in which the employees are self-motivating and working continually to improve all the various elements of the organization. When people are this involved in what they do, it becomes their passion and they become even more motivated. And, employee turnover becomes a thing of the past!



Article Source: http://EzineArticles.com/?expert=John_Beane