Staff Turnover - A Business Killer

By J Timothy Connor

Finding the right staff is critical, as we discussed in the article "Finding Staff to Complement Your Business". But what about keeping good staff? Is it important? Is it worth the effort to keep the right folks on the job? Let’s look at the four areas that staff turnover affects – in a business of any type. Those areas are: Productivity, Revenue, Customer Satisfaction, and Long Term Viability.

EFFECTS ON PRODUCTIVITY

Increasing work for the remaining staff... This is rather obvious, but think about the work that’s being left undone. If a staff member has to cover the phones because the receptionist has quit, she is going to omit work somewhere. In the choice between her regular work or answering the phone she’ll do the one she feels is more important. But in her consideration she has to think of the effect of unfinished work on other folks in the business, and she will likely make her choice based on the amount of flak she thinks she’ll get from others. If she’s conscientious, her sense of duty will play into it; but one of those jobs will not be done well, and staff and customers know it’s not being done well.

Lower morale for ‘good’ staff...

Staff who work hard – those with a sense of duty and industry, tend to be much more negatively affected by the increased work generated by high staff turnover. These staff like to get things done completely and well, and that’s almost impossible when a vacant position’s work also has to be covered. Consequently, and this is a killer, it’s the best staff who tend to be most depressed or angry about vacancies, and are more likely to walk if the situation remains unresolved.

EFFECTS ON REVENUE

Whether it’s because they’re physically missing or that they can’t do as much when they’re filling in for others, missing staff mean you’re just not going to get the same sales volume. With staff vacancies, neither remaining staff nor the boss can work as fast. Vacancies result in technical work being delayed, information not being collected, customer calls being delayed or missed altogether, and sales not being supported. All of these will result lower revenues now, and probably in the future.

EFFECTS ON CUSTOMER SATISFACTION

Modern customers are extremely aware of service and product quality. As the new millennium unfolds, offshore competition has made many of its inroads through higher quality products and better services to support them. Because of this, most American companies have had to increase service levels far beyond what they were 60 years ago. While that’s not a bad thing, it means that you’d better be keeping up with customer expectations. And guess what? That’s difficult to do when you are turning staff over. Besides the negative effect on remaining staff, there are the challenges that new staff bring to the business. They have to be trained, and the learning curve to get them up to speed takes time – there’s no way around it. During the training period mistakes will be made, and many of them will involve customers. Customer problems have to be resolved, and THAT takes time, and a good knowledge of the business, which often means that older staff have to be involved, adding to their discouragement and lowering morale. The result: high staff turnover is going to guarantee lower customer satisfaction for your organization.

EFFECTS ON LONG TERM VIABILITY

This is another one that isn’t rocket science: if your customers are leaving you for other companies, you’re not going to stay in business long. Customer loyalty is critical to the long term health of your business, and you MUST seek ways to build it. That means keeping the right staff on board, so that service and product quality remain high and are seen as seamless by those buying your products.

TIPS AND TRICKS...

FIRST, to prevent turnover, have regular meetings with your staff to discuss how to run things better. Keep the agenda very short – What are the top two things you’d like to see improved? or How do YOU think we can do this better?. And then be quiet and take notes. When you do this kind of meeting, be SURE to follow up and address the ideas that come up. Be honest, if you don’t think an idea is workable tell them so, but look for ways to implement as many of the ideas as possible. When employees know that you are listening and that something will be done, they are much more likely to stick around. And not only that, but they’ll work harder and enjoy the job more.

SECOND, write up a set of interview questions for each position in the business, and have a plan for immediate action when a staff member leaves. Fast replacement will keep remaining staff happier, maintain productivity, reduce rework and liability, and improve your customer satisfaction. It’s worth it!

The author of this article, Tim Connor, is president and founder of Rodeo! Performance Group, Inc., an Ocala, Florida-based group of facilitators working with businesses and executives who want to make their businesses competitive on a global scale. Tim can be contacted at timconnor@rodeopg.com, or by phone at 1-877-284-0009. Visit Rodeo! on the web at http://www.rodeopg.com.

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