Employee Retention Survey Results
In April, I presented The Magic of Employee Retention at the Nevada State Society for Human Resource Management [SHRM] conference. During my presentations I surveyed the participants on the retention questions listed below. I've added my comments to the survey results.
The sample size is not large enough for statistical analysis. However, their responses may provide you with several solid ideas.
Future Common Sense Managing newsletters will contain the content of the magic of employee retention.
What percent of annual salary do you estimate it costs to replace an employee [include ALL costs in your estimate]?
15% - 200% of annual salary [most answers were in the 50% to 200% of annual salary range]
Actual replacement cost?
Insufficient data to report
What cost factors did you include to estimate what is costs to replace an employee [please check all that apply}:
Advertising - 100% of respondents checked this one
Interview time - 100%
Background checks - 86%
Productivity loss during learning curve - 70%
Orientation - 70%
Testing - 57%
Training - 57%
Uniforms - 30%
Tools - 30%
Head hunter - 0%
Relocation costs - 0%
Signing bonus - 0%
What is the net profit that your typical customer contributes to your organization?
Respondents did not know
COMMENT: The negative impact turnover has on customer loyalty and retention magnifies the cost of turnover. You can't provide outstanding seamless service with rookies and second string replacements.
Living proof is the "Fantastic", "In Your Face", "New" XFL [marketing] in which players drop simple passes, incur countless penalties, and fumble the ball like it was a greased pig [service quality]. The result?
Every couple of weeks I turn on an XFL game long enough to wait for the camera to pull back enough to see the near empty stadium. Their customers are gone. The point is, you can't win a Super Bowl with rookies. Neither can your organization. Producing quality seamless service the earns customer loyalty requires knowledgeable, capable, and caring employees. You're only as good as your employees!
What do you estimate it costs your organization to acquire a new customer?
[Include advertising, sales calls, set up costs, and others]
$ 1,000 - 10,000
COMMENT: In my experience customer replacement cost is quite a bit more than the above amount. Acquiring a new customer costs include marketing, advertising, sale call[s] time and expenses, price concessions, and service concessions.
I asked these questions because I believe the following formula reflects the actual cost of turnover.
Actual Cost of Turnover:
Cost of employee replacement
+ Lost of customer profit contribution
+ Cost of replacing a lost customer
TOTAL Turnover Cost
Two casino HR managers told me that their GM is OK with 100% turnover and considers it simply a cost of doing business. I doubt that those GM would continue to think 100% turnover is "OK" if they knew that actual cost impact that turnover is having on their business.
What effective things is your organization doing to retain its best employees?
Training
Training for managers
Empower [employees] to handle guest complaints
Acknowledgement
Service awards
Early increases
Feedback on performance appraisals
Beginning to assess causes
Help Award - based on over and above performance - given as and when earned
Increase salaries when needed to match our competitors
At end of [ski] season I send everyone [employees] a thank you with some wraps and results of the season. Then after the summer I send a second follow up to see if they are coming back and use it as a vehicle to start a theme for the [next] season.
Ask and be interested in their ideas on how to improve work environment and programs.
Practice the art of caring leadership. Be open and honest with all people.
I have them ride the 1st chair in the morning with me and tell them that they are here because of the hard work that they have done. [Parking lot supervisor at ski resort.]
Please list any retention actions that failed or backfired?
Offer money, but have poor supervision
Raising pay ranges and nothing else
COMMENT: Before the conference I pilot tested my presentation with a group of managers at Sierra-At-Tahoe ski resort. During that session I asked the following extra question.
What actions do you take to recognize and reward your people on a daily/weekly basis?
Magic moments [a scratch off card given the day of the exceptional behavior - good for an immediate credit at the ski resort plus a chance for a trip for two to Hawaii at the end of the season]
Reward 100% dress code compliance each day it occurs
Work WITH them
Make them a part of their organization
Talk with everybody in the morning
Feedback [informal, positive and negative] at the end of the day
Share customer comments cards [with employees]
Acknowledge "my favorite lift operator" based on customer comment cards
Top employee for week gets to ride the 1st chair with me on Saturday and Sunday
Trash pickup - fullest bag gets a prize, leanest bag gets another bag to fill
NOTE: Almost every one of the above ideas costs little or nothing to implement.
Bill's The Magic of Employee Retention session was: Very good, Excellent [love things that can be used ASAP, Great!, Very good - Thanks! For the ideas!, Excellent & informative, Informative, Outstanding, Needed more time, Gained several actions that I can apply right away!, WOW!
COMMENT: OK, including the participants' comments is bragging. Just wanted you to know I do more than write newsletters and books. The Reno SHRM chapter has invited me back to speak in June on my favorite subject: Common Sense Managing.