I keep seeing this quote on social media: “Employees who feel valued will do more than expected.”
Employee Engagement is a current concept garnering lots of attention. Employee Engagement refers to and measures how connected and committed an employee is to an organization, its product and its customers. High employee engagement can result in greater productivity, increased morale and higher retention. Therefore, companies are looking for ways to increase employee engagement. One such way is employee incentives and recognition.
According to a 2014 paper by Society for Human Resources Management (SHRM) “employees not only want good pay and benefits, they also want…to be valued and appreciated for their efforts” (Society for Human Resource Management, 2014). While some organizations may shy away from formal recognition programs because they think they may be too expensive to implement, it is not necessarily monetary recognition employees are looking for. Recognition can be internal recognition, public recognition or staff appreciation events. Even small items like t-shirts, gift cards, thank you notes, and coffee mugs can be effective if genuinely presented for noted achievements.
Also, there are any number of areas for which a company can structure a recognition program depending on the organization and its employees. Some such areas according to SHRM can be as simple as attendance and years of service or more involved like systems improvements, talent acquisition, innovation, and/or “champions of change.” Recognition can be structured however the organization can effective track and designate employee contribution. Then recognition should be consistent and immediate. An inconsistent program will not motivate employees. But overall, good recognition programs can be very effective.
Taking recognition to the national level can not only motivate employees but provide credibility to both the employee and the organization. National recognition can be an organizational designation or recognition coordinated with industry associations or regulatory agencies. There are a number of national designations, awards and achievements available for employees and organizations to draw from within every industry. National recognition can bring a level of respect from subordinates, coworkers and customer’s alike. It may even motivate other employees to strive to obtain the same designation and recognition.
Give as much thought into how to win over your employees as you do your customers; your employees are your customers. Treat them right and they will treat your customers right.
References
Society for Human Resource Management. (2013, March 21). Developing and Sustaining Employee Engagement. Retrieved from Society for Human Resource Management: https://www.shrm.org/templatestools/toolkits/pages/sustainingemployeeengagement.aspx
Society for Human Resource Management. (2014, September 12). Managing Employee Recognition Programs. Retrieved from Society for Human Resource Management: https://www.shrm.org/templatestools/toolkits/pages/employeerecognitionprograms.aspx
Kim Jimenez has been a regular contributor to the MDS website and MDS blog for the past 15 years. Kim holds a supervisory position in a Fortune 100 company and has extensive experience with a multitude of employee, training and leadership issues. She is currently obtaining her degree in Human Resource Management at Southern New Hampshire University
I recently completed a two-webinar series on employee retention/turnover. If you did not have a chance to watch those in person, please visit our YouTube channel at MDSseniorliving to view any of our past webinars. Probably the most asked question after each of these webinars was “How do you measure employee turnover/retention?” I thought this would be a good space to go into employee turnover/retention measurement a little bit further.
Defining Employee Retention and Turnover
It might be helpful to define retention and turnover. There are multiple definitions and different ways to measure each of these so I will discuss the generally accepted standard definitions. Measuring employee retention usually means picking some time frame to measure what percentage of employees have been employed with the company that long. I generally use a year as a base for retention, but the time period can be adjusted to suit your specific needs. Employee turnover is anyone who separates from the company, either voluntarily or involuntarily, and must be replaced. This could be due to retirement, being a stay-at-home parent, other self-induced separations, and forced separations.
Attainable Employee Turnover Rates
Due to the definition of employee turnover, it is highly unlikely that any company would ever have a 0% employee turnover rate. While it may sound somewhat counter-intuitive at this point, actually having 0% employee turnover rate in larger organizations would not be a good thing. It seems there will always be those in which we have to ask to leave our employment and those that move-on on their own. Additionally, bringing in new people to an organization leads to fresh ideas and new perspectives on old methods. Generally a 10% – 20% turnover rate is acceptable and attainable.
While not a lot of people measure it, job vacancy can be a crucial workforce indicator. There is an inherent cost to vacant positions, which are somewhat more difficult to calculate but it can be done. Vacancies can have a toll on workforce morale due to the added load it puts on other employees, as well as affecting customer relationships through poor service. If employee overtime is at an escalated level or has been steadily increasing and/or customer satisfaction ratings are dropping, it may also be a good idea to look at the position vacancy ratio.
To calculate this measure, divide the average number of vacant positions over a specific time frame by the total number of authorized positions in the company or department.
Calculating Employee Turnover
So let’s start off by looking at employee retention of one year or more. You would take the number of employees who have been employed at your company for one year or longer and divide that by the average number of current filled positions. In measuring retention and turnover, if the number of filled positions fluctuates during the time periods you measure, it would be best to take an average of filled positions. This could be done by taking the filled positions at the beginning of the month and those at the end of the month and running a simple average.
When measuring employee turnover, there are a few more steps that we may want to go through. This can be done over any time frame in which you desire. The only thing you’ll need to remember is that you will need to annualize for any time periods that are less than a year. Because the number of separated employees will more than likely continue to grow throughout the year and the number of filled positions will remain fairly constant, the number should be annualized for consistency.
If you’re comparing one month to one month or one quarter you can use the raw number, but to measure employee turnover for one month and to use that rate to speak in general terms of employee turnover would be incorrect. A good general measurement to start with is to take all the people that separated within a specific time and divide that number by the average number of filled positions during the same time period.
There are many variations of detail in which you can measure employee turnover. While the general overall turnover of a company or department is a good place to start, if it’s a small company a large number can be misleading because there are not a lot of total employees. Therefore, each employee who leaves will appear magnified. In just the reverse, if you’re within a very large organization, a generally low number may cover up hot spots within departments or divisions within the company. For these reasons there are a few more steps that I would recommend.
Length of Employment
Probably the most important secondary measure of turnover would be the factor of time. Usually a large amount of employee turnover happens within the first year of employment, with most of that coming within the first 60 days. Selected time periods should be looked at in depth in order to find problem areas within the system. I would recommend looking at 30 day, 60 day, 90 day intervals as well as 180 day, 270 day, and 365 day increments. In order to measure this segment of turnover you would take the number of separations during the specific time period divided by the total number of separations. This should help you isolate any troubled spots.
Some of the other areas that you may want to measure would be voluntary and involuntary separations, high achievers versus low achievers, male versus female, turnover by department, and other variables that may be important to your company. These sub-measures will help you isolate any problem area to allow greater focus of developing targeted solutions.
Employee Turnover – A Runaway Locomotive
This has been a very simplistic view of employee retention/turnover measuring and I hope it has help you in some way. When I speak of other Income Statement and Cash killers such as “Cost Creep,” I call it the silent killer, but Employee Turnover is just the opposite. It is the runaway locomotive barreling down the tracks through the middle of town with everyone running and screaming to get away from it, but very few addressing the large looming issue head on. It’s difficult, there are no doubts about it, but the cost to your organization is extremely high where measurable, and damaging in areas that are unmeasurable.
If you are experiencing high employee turnover, I would encourage you to give me a call. We can work together to solve this issue. It is not one that can be solved overnight, but it is one that can be solved. Think about each employee and the cost associated with them when they walk out the door. The cost is astronomical when you assign a dollar figure to it. And there is also the toll it takes on your residents, those who need change the least.
Next Webinar — “Professional Sales: Back to Basics”
My next webinar is “Sales: Back to Basics—Lessons from Mystery Shopping.” Join us on Thursday, June 25, 2015 at 1:00 p.m. CST. Register here. We look forward to you joining us!
Roy Barker is Director of Special Projects at Moore Diversified Services, a Fort-Worth, Texas-based organization specializing in senior living operations analysis, marketing development, and investment advisory services. Roy is an authority in the field of employee turnover analysis and retention strategies.
The other day I saw this question posed to others in a forum, “what do you do to show your employees they are involved?” The obvious answer to me was, don’t just try to show them, actually get them involved.
I’m sure the intent of the question was supposed to be “how do you involve your employees,” but it didn’t really come across that way. This does bring up the question of do you only do things to try to “show” employees they are engaged, or do you actually involve them? The point being is that if you truly involve your employees, you shouldn’t have to look for ways to appear that you are. Employees are very perceptive when programs or the latest buzz words are being hyped. However, if these programs are not actual practices in their workplace, it comes across as if management is trying to pull a fast one on them.
In this 3-part blog series, we’ll explore ways to make sure your employees feel truly engaged to help you with employee retention as well as ensure your customers receive quality service.
Where To Start
There is no end-all, be-all list of engagement ideas. Some techniques will depend upon your business model, you and your employees’ personalities, what motivates your employees, and what you view as quality outcomes for your customers.
It’s usually best to start at the beginning with the hiring process. Find candidates that mesh well with your current corporate culture. You can always teach and train to skill. Make sure you take the time to orient employees not only into their job, but into the company culture. Unfortunately, this step is often not comprehensive, a low priority, or skipped altogether.
Make sure to join me next time as we continue to explore ways to engage your employees.
Roy Barker is Director of Special Projects at Moore Diversified Services, a Fort-Worth, Texas, based organization specializing in operations analysis, marketing development, and investment advisory services. Roy is an authority in the field of employee turnover analysis and retention strategies.
According to a 2014 paper by Society for Human Resources Management (SHRM) “employees not only want good pay and benefits, they also want…to be valued and appreciated for their efforts” (Society for Human Resource Management, 2014). While some organizations may shy away from formal recognition programs because they think they may be too expensive to implement, it is not necessarily monetary recognition employees are looking for. Recognition can be internal recognition, public recognition or staff appreciation events. Even small items like t-shirts, gift cards, thank you notes, and coffee mugs can be effective if genuinely presented for noted achievements.
