Workforce Management Solutions During High Employee Turnover

Losing and replacing employees is expensive. And employee turnover is one area that doesn’t create efficiencies with volume. The Society of Human Resource Management estimates the per employee cost for turnover is anywhere from 100 to 300 percent of the salary in question. The only way to mitigate the costs of high employee turnover is to implement workforce management solutions that minimize employee turnover in the first place.

The first step to tackling high employee turnover is to run your numbers so you can identify when you’re in a period of high turnover. Some attrition is normal and some industries and roles tend to have high churn rates. That doesn’t mean if your company is in such an industry, you can ignore your own employee turnover, but it does help place your experience in context. Managing your workforce is all about smart allocation of resources, not expending time, energy and money trying to get your employee churn down to one percent if your company is in retail or food.

Where you see the peaks and valleys of high employee turnover, start looking for the patterns that give clues as to the reason for the peak or valley.  Keep in mind that employee turnover comes in two flavors: voluntary and involuntary. That’s your starting point to start investigating for patterns.

Workforce management solutions to manage voluntary separation

I write “manage” because having a bad, or low performing employee voluntarily separate is a good thing. When you analyze your voluntary separations and realize that you were happy to see most of them go, that tells you your real workforce management challenge is in hiring.

This begs the question though: who are your most valuable employees? Do you have clear criteria you can use to assess whether losing a specific employee was a net gain or loss? For example, run the time and attendance data for employees to benchmark your company’s overall schedule adherence rates and absentee rates. Assuming they’re at an acceptable level on a company level, you can now make determinations on individual employees. Are those leaving the ones with acceptable or stellar schedule adherence and low absentee rates? If so, you know you need to get pro-active to find out why and put in retention strategies that target your high performers.

Further analysis of your employee turnover patterns can help paint the picture of why people are leaving. Are turnovers concentrated in a certain department, manager or time of the year? If you look at the payroll history of high-value employees who left, what was the average length of time between raises? How long ago was their last pay increase or promotion? Look to recent benchmarks in compensation for your industry – is your company still competitive?

In addition to what the data tells you, take their exit interviews seriously. Were they bored or frustrated by lack of training or advancement opportunities? Does a manager need some training? Maybe a small adjustment in shift start and end times means workers can avoid rush hour drives or be home from a late shift in time to help the kids get off to school.

Minimizing involuntary employee turnover

Involuntary employee turnover occurs for three main reasons:

1. A low performing employee is fired

2. Increased efficiencies make certain roles unnecessary

3. Revenue shortfalls put the pressure on to reduce labor costs

Employee performance reviews, along with the analysis of their schedule adherence and absentee records, tell you which employees might benefit from remediation, rather than moving to firing them too quickly. A proactive, effective remediation program will cost less in the long run, than having to recruit, replace and train new employees. It also strengthens the employee commitment to the company by making it clear you’re willing to invest resources to support employees’ to excel, which will help keep your voluntary separation down as well.

Regarding the impact of revenue shortfalls, there are workforce management solutions that can help a company bring down its payroll without having to lose employees. Using automated time keeping systems to capture employee time and attendance, instead of using manual reporting or punch cards, reduces overall labor costs. In fact, data integration between time clocks and your payroll solution, as well as improved data integrity from the terminal data collection, can help reduce labor costs by reducing the number of effort hours it takes to run payroll. This is where there may be an involuntary separation due to increased efficiencies. Yet, just as seeing a bad employee voluntary separate is a good thing, keeping labor costs down by improving efficiencies is also a good thing.

Indeed, implementing these workforce management solutions to minimize your employee turnover will help you find efficiencies and budget, which can be used to reinvest in the workers you want to keep.

While ATS is passionate about time and attendance and excited to support organizations navigate workforce dynamics around timekeeping, we recommend you reach out to your regional and/or local HR chapter for more information on common workplace advice and procedures.