Solomon Bruce Consulting Blog

Tuesday, January 12, 2010

Eliminate Personnel Turnover--Here is How!!

One of the most vexing problems that many business owners face is personnel turnover!  Some businesses that we have worked with have had personnel turnover exceeding 300% in a year.  That means, that they have had 3 different people for each job, just in a short 12 month timeframe!!!

Wow, you say, what is the problem at that company?  What are they doing that causes so many people to leave so rapidly? Must be a horrible manager?

This is a question that we are frequently asked.  The answer is actually quite simple, somewhat intuitive, however, sometimes difficult to comprehend.

The first question we ask as we work with the business owner is, "Do you have job descriptions for each employee?"  Normally, the answer is NO-- we don't need a job/position description for our line of work.

A job/position description is key to any position for any employee that you have.  This job description should outline the duties and responsibilities of the job, any health or safety hazards that the incumbent may be exposed to, travel responsibilities, supervisory responsibilities, who the supervisor is.  These are basic job description requirements, additional requirements can be addressed if germane to the position.

The company should have a complete and comprehensive procedures manual documenting all of the various processes and procedures that the firm uses.  This is complicated and somewhat tedious, however, once completed, you will say prayers many times over for identifying each and every process that your firm uses.

Salary is another key point.  The old adage, "You get what you pay for" is no more important than in the personnel arena.  It is true that you can find individuals to work for a certain pay level.  It is also true that you will find "higher grade" candidates if you elect to pay more than just the basic industry minimum.

I am aware of a firm that is in the food processing industry.  The firm has several employees, all of whom have only a high school education.  However, the firm has a turnover ratio approaching 0%-- meaning, once somebody gets hired, they don't leave!!  They like the firm and the boss.  Here is what is interesting-- they starting salary is about twice minimum wage, with the maximum salary about three times minimum wage.  Yes, they have a full benefit package, health, retirement, vacation, 401K, etc.  The firm has a very comprehensive position description for each employee.  Everybody knows what is expected of them.  The procedures manual is equally complete and comprehensive.  The owner is a firm believer in education and training, insuring that her staff is constantly trained on all of the new processes and procedures of the industry.

Does paying a greater salary, having clear and comprehensive job descriptions as well as a complete policy manual actually cost more money?  The real answer is NO, it is actually cheaper, in the long run, than to not  develop anything.  YES, there is an initial cost involved with developing the job descriptions and procedures manual, however, that cost is rapidly returned several times over when employee turnover is reduced to almost zero.

  • Does your firm experience substantial employee turnover?
  • Does it seem like there is continual employee discontent and frustration?  
  • Do your employees know what is expected of them each and every day? 
  • Do you fairly and adequately compensate your employees for their contribution to your firm?  
  • Are your employees happy to work for you?
If the answer to these questions is NO, then perhaps, you should seriously consider making some key "field adjustments" in your personnel operating policies.  As a business owner, you may experience some short term pain and frustration, however, the long term return on investment is significant--- and you will reduce your employee turnover rate.

If you need help on this matter, let us know, we can give you the assistance you need to increase your profitability and efficiency and reduce personnel turnover!


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