Employee turnover can be a difficult issue for many companies to grapple with. It’s an important one, though; turnover adds substantial costs to the organization in time, money, and productivity.
The difficulty is enhanced when the reasons for the turnover aren’t apparent. But, there are ways to mitigate the losses and reduce the overall turnover rate by addressing the typical factors that cause employees to leave. In this blog, I wanted to discuss several ways in which we can decrease employee turnover and hire the right people by using the Dynamics 365 for Talent app, which can help with this endeavor.
How to Calculate Employee Turnover Rate
To start, let’s review how to calculate your company’s turnover rate for a given period of time:
100 x Number of Employees Separated During the Period / Average Number of Employees During the Period
Next, let’s take a look at the software that can help to improve that number.
What is the Dynamics 365 for Talent?
The Dynamics 365 for Talent app is a cloud-only, true SaaS application that is a HR Management Tool. It focuses on most Human Resource functions that are separated from your financials system. The many functions contained in this application include employee retention, benefits administration, recruiting, on-boarding, staff training, communications, and performance tracking.
Besides that functionality, the application also has extensive tracking capabilities through dashboards and analytics, with direct ties to LinkedIn functionality. The base system is not customizable, but it is very extensible, depending on the needs of your organization. Dynamics 365 for Talent provides the visibility we need to find and maintain the right people for the organization.
The Many Costs of Changes in Staffing
The cost associated with an employee leaving can be quite substantial. It’s not just the loss of raw productivity; it’s also the loss of an investment in training, knowledge, and experience that the employee has gained throughout their employment. Oftentimes, we invest in our personnel through training and experience so that they can perform their function in the organization. When they leave, a functional gap is realized. We can cross-train employees to try to mitigate this gap, but since the function is not typically performed by the cross-trained employee, inefficiencies develop, performance slows down, and functional items may be missed or lost.
The organization suffers in the short term as a result.
The cost are not just limited to the loss of the employee; we may need to find a replacement, too. The replacement cost associated with hiring a new staff member can be quite extensive. The Society of Human Resource Management estimates that six to nine months of salary is required to find and train a replacement. Searching and attracting an individual can be quite costly via advertising, head hunters, social media, interviews, etc. Onboarding and training the new hire adds additional cost, and it takes time to get them up to speed.
And, of course, even after the costs associated with the new hire are realized, it is difficult to know if the new employee will be the perfect fit.
When an employee leaves for whatever reason, the current organizational structure feels the effects. Remaining employees feel less secure, and question why the employee left. The current processes no longer run as smoothly, and pressure is placed on the remaining staff. Processes do not run as smoothly. Employees lose time assisting with questions from new hires.
A good example of this is Tuckman’s Model – a theory of group interaction by psychologist Bruce Tuckman. This model proposes the stages a team or organization will go through as a situation develops. The stages are Forming, Storming, Norming, and Performing. An additional stage is added for a team called Adjourning, but it does not apply in this instance as it considers the Team as the entire organization.
The organization processes through these stages until the organization is Performing. If an employee is removed and later replaced, the entire process resets, and it takes time to once again achieve the Performing stage.
The main takeaway: employee turnover hurts performance.
How to Decrease Employee Turnover
As discussed above, the causes of an employee leaving the company can’t always be determined, but we can try to mitigate the more common causes. The causes should be addressed from the first contact, even prior to the employee being hired, all the way throughout their employment history with the company.
1. Hire the right employee
Select the right people for the position through screening. The Harvard Business Review found that 80% of employee turnover is caused by bad hiring decisions. A poor hire can poison the current environment. Screening can be accomplished through interviews, competency testing, social media searches, education verification, and experience verification.
Document the qualification of the position and match those qualifications with the smartest people that possess those qualifications, but who won’t be bored by the position. Make sure their personalities mesh with the current company dynamic so as not to create waves within the organization.
This not only demonstrates their ability to perform the job, but enables them to grow within the company and makes them good contributors.
Offer a competitive benefits package that attracts them to your company. The benefits may include items such as life, disability, flexible hours, a 401k with good match, vacation, etc. The benefits package should not only attract them, it should also address their future needs to encourage them to stay and grow with the company. Their benefits should be visible to them through things such as an employee portal after they are hired.
In the Dynamics 365 for Talent app, the system can assist you in locating the right individuals for the position with simplified evaluation methods, documentation, and direct links to LinkedIn accounts. The application improves documentation and communication between the individual and the company for a smoother hiring process. Further, it allows for a more streamlined engagement with the potential new hire through Office 365, to coordinate calendars and set appointments, tracking the information for current and future reference.
After the right candidate has been hired, make them feel like they’re part of the team. Clearly communicate and document their title, roles, responsibilities, and career path. Establish, document, and track the employee’s performance objectives and personal goals, as well as how they will be measured. And do with their input, to ensure that they feel that they’re part of the process.
Include management’s input in all communications. According to a survey of top executives, 30% of candidates who separate from the company leave due to unclear performance objectives, and only 35% of companies include management in their on-boarding process.
In the Dynamics 365 for Talent app, the system can assist you in the onboarding process. The system makes the employee part of the process and personalizes the experience. It provides real-time dashboards to monitor their performance objectives and successes. The app allows them to share contacts and resources to increase productivity for not only the employee, but the company as a whole.
3. Employee Retention
Nothing can guarantee employee retention, but there are several ways to make the company environment more appealing and productive. The employee should feel they add value to the organization, and that they’re provided with the tools they’ll need to succeed.
- Provide training for the skills that are required to perform the employee’s function, and track that training to ensure the employee obtains the skills.
- Provide and track additional training that encourages employee growth, to assist them in meeting their career objectives. Allow the employee to train others from what they have learned in order to reinforce their skill and pass those skills to other.
- Provide mentoring to the employee so that they have a senior contact whom they can ask questions, and who can guide them through the company’s environment to make them a part of the team. With a mentor, they’ll feel a lot less like an island within the organization.
- Management should provide regular meetings with the employee to listen to their ideas, needs, and concerns. Make these meetings a positive force, and show the company values and respects the employee as an individual.
- Encourage a balance between work and life. This discourages burn-out, which can end in an unhappy and unproductive employee. It further can make the employee enjoy work more.
- Provide team building opportunities on a regular basis. Some ideas are Holiday parties, picnics, and team building exercises outside the office to reinforce the team atmosphere.
- Recognize their good work through awards and a bonus structure however trivial. This makes the employee feel more valuable and encourages them to be more productive.
All of these practices provide additional value to the organization and allow the employee to grow.
Dynamics 365 for Talent assists with many of the tasks associated with employee retention and much more. The system enables the organization to track and document training, certifications, skills, accomplishments, and personal development to highlight areas of interest. It enables the company to document the communications between the company, managers, and the employees to provide guidance and support. The application allows for the monitoring of collaborative goals, objectives, and performance with real-time feedback.
Ready to get started? Get in touch with us, and start improving your employee turnover rate today.