Reducing Cost of Turnover Is Higher Priority

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<strong>Boston &mdash; Jan. 17</strong><br />With unemployment rising and concerns about a possible recession growing, it&rsquo;s becoming a higher priority for employers to control costs. Even with a rising unemployment rate &mdash; which spiked to 5 percent in December &mdash; and a larger pool of potential employees to choose from, employers need to reduce the cost of turnover of current workers, particularly those who work on the front lines, according to ClearRock, an outplacement and executive coaching firm headquartered in Boston.<br /><br />&ldquo;In a slowing economy, it&rsquo;s critical that employers are able to more closely manage their expenses. One cost they can get better control over is turnover. It costs between two and three times a worker&#39;s salary to replace a departing employee, including recruitment, training, lost productivity and severance costs,&rdquo; said Annie Stevens, managing partner with ClearRock. <br /><br />Almost four out of 10 (37 percent) employers surveyed by ClearRock reported an increase in the turnover of front-line employees in the past six months. Front-line employees are workers who are usually a customer&#39;s first contact with a business, such as salespersons, customer service representatives, wait staff and counter persons and other sales and support staff.<br /><br />The top ways to reduce turnover of front-line employees requires a commitment to more carefully selecting, screening and training workers, according to the ClearRock survey of 94 organizations with operations nationwide.<br /><br />Raising employees&rsquo; pay and benefits is the fifth most popular &mdash; and not the first most popular &mdash; way that employers are attempting to reduce the turnover of front-line workers. &ldquo;Companies are trying to reduce turnover first through nonmonetary methods because there is usually only a short-term payoff from employees after they receive raises, bonuses and better benefits. Increases in employee engagement and morale that may result from better pay or benefits usually decrease within a matter of weeks or months, so more employers are trying to address the underlying causes of turnover,&rdquo; said Stevens. <br /><br />The top way to reduce the turnover of front-line employees is to screen them more carefully before they are hired, which was chosen by 69 percent of survey respondents. &ldquo;Companies need to invest more in pre-employment screening and testing and better interviewing processes and procedures,&rdquo; said Greg Gostanian, managing partner with ClearRock.<br /><br />Giving better orientation to front-line employees is the next most-popular retention method, which was chosen by 57 percent of survey respondents. &ldquo;New employees need to know, right from the start, what their roles and responsibilities are, the type of business their employers are in, who their customers are, and how each individual worker fits into the big picture,&rdquo; said Stevens.<br /><br />Exit interviews with departing employees are the third most popular way to reduce turnover of front-line employees, selected by 56 percent of survey respondents. &ldquo;Exit interviews give employers insight into potential problems with management, workplace conditions and the competitive nature of their compensation and benefits. Exit interviews should be offered as often as possible to employees who are leaving, and their comments should be closely considered and evaluated,&rdquo; said Gostanian.<br /><br />Better training programs are the fourth most popular way to reduce turnover of front-line workers, selected by 54 percent of survey respondents. &ldquo;Better training programs are the hands-on component of better orientation programs,&rdquo; said Gostanian. &ldquo;In addition to knowing why they are working there and what their duties are, employees need to know how to do their jobs as best they could, who they can go to in case they encounter any problems and where to find answers to their day-to-day questions.&rdquo;<br /><br />Giving better pay and benefits to employees finished as the fifth most popular way to reduce turnover of front-line employees, selected by 44 percent of survey respondents. &ldquo;Employers are using more broadly based methods that will give them longer-term results than a temporary increase in employee morale and engagement resulting from monetary incentives,&rdquo; said Stevens.<br />

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