Not really thinking about voluntary turnover these days?

Increasing unemployment rates drives voluntary turnover down, so it is easy to think voluntary turnover is not really a top of the list concern these days (the silver lining in the current environment?!).

This morning I saw some information that suggests it still should be. The article suggested that by 2018 – 2020  average turnover rates could range from 13% – 23% a year.   Those levels probably look like a pipe dream to service industry organizations where turnover is much higher and are terrifying to  environments where turnover is significantly lower.

It is well-known and understood that employee turnover is expensive – it costs between 50% and 150% of salary depending on the job.   The aging population is driving the rate of voluntary turnover up.  Each year, as the boomers age, there will be more people choosing to leave their jobs and the workforce.

For a 100 employee company with an average salary of $41,600 ($20.00/hr for a 40 hour work week) an annual turnover rate of 5%, turnover will cost the company at least $104,000 per year.  If we use the Canadian national average annual salary of $49,000, the 5% turnover rate, at the 50% of annual salary cost,  that number becomes $122,500.

Increase the turnover rate to 10% – well below those 2018 – 2020  projections – and use Alberta’s annual average salary of $60,476 (at December 31, 2014)  the very conservative turnover cost  of 50% of salary will  result in turnover costs $300,000/year for a 100 employee company.  At a cost 100% of salary that number is more than $600,000/year and at 150% it is upwards of $900,000/year.

It is easy to think this is something that can wait – today’s issues are more pressing.    The solutions to today’s issues can establish the foundation for minimizing future challenges or they can ensure the future challenges will be more significant. Balancing the urgency of today’s issues with the importance of tomorrow’s is possible when there is a well thought out plan in place for doing so.

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“No good work goes unpunished” ….

…. said a friend of mine in a moment of pure frustration a while back.  The thought returns to me now and then – this time in regard to Canada Post’s suspension of the super box program.  Their great change management process couldn’t prevent the backlash around home delivery.  Pity!

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Canada Post – Change Master!

Up until last week we have had home mail delivery.   Now we are picking up our mail from a super-box about a block away.

Canada Post has done a magnificent job of preparing us and our neighbours for this change. We received our original notice about it early this year. Over the last 8 months we’ve been provided a process map and ongoing status reports.   About a week before we started using the super-box we were provided an information package about it along with our keys.   Our postal delivery person was well informed about the process and timing; provided information and answered questions.

A couple of days before we started using the super-box we happened upon the Canada Post team who were checking the postal box assignment to addresses and their master list. They spent a few minutes chatting with us about the service change indicating the positive attributes of it and letting us know that no one at Canada Post was losing a job as a result of the service change and that individuals who were not able to get to the super-boxes would continue to receive home mail delivery.

All in all the management of this change was handled perfectly. We were informed early about the change, were provided with great information over the months between notification and implementation and the service providers we regularly interact with were well informed and shared information well.

Over the years Canada Post has been one of those organizations we’ve loved to grumble about.   This is not our old Canada Post and we couldn’t be happier.

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(I Can’t Get No) Satisfaction

Organizational Satisfaction surveys are intended to provide information about whether the company is successfully creating a work environment in which employee expectations are adequately fulfilled.   The underlying assumption is that satisfied employees will be more productive overall and less likely to leave the organization.

In essence, satisfaction surveys are being used as a proxy for trying to understand how to engage employees in the work they do and in the mission and goals of the companies they work for.   Engagement – the state of employee involvement desired by companies – is not the same as satisfaction and identifying it requires different metrics.

The craving for engagement expressed in this verse of Satisfaction:

He’s tellin’ me more and more
About some useless information
Supposed to drive my imagination.

Mick Jagger, Keith Richards

Engagement produces creativity, productivity and both emotional and mental commitment.  Engagement is “being in the zone”,  or “a state of flow1” which becomes possible when there is a balance of a high level challenge and skill, clear purpose, immediate and unequivocal  feedback and concentration on the work.   Intrinsic satisfaction is exceptionally high when an individual is engaged.

Building an Engaged Workforce is an HR Trend that has been around for a while and is likely to stay for some time because studies have indicated that when people are genuinely engaged (not just satisfied), productivity and profitability increase, shareholder value increases and attraction and retention of key talent improves.

(1 A State of Flow – Mihaly Csikszentmihalyi in his seminal work on work, motivation and happiness describes the condition as “a state of concentration or complete absorption with the activity at hand and the situation.)

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Why a Workforce Strategic Plan?

Earlier this month Statistics Canada told us something we had already figured out – the unemployment rate was up – not a lot – to 7% from 6.8% last month. In Alberta the unemployment rate has risen to 6% up from 5.2% at the same time last year. 7% unemployment means that 1.35 million people who want to work do not have jobs.

Along with the national 7% unemployment rate we also have a national Job Vacancy Rate (the share of jobs that are unfilled) of 2.6% or roughly 400,000 jobs.     We have a Dependency Rate (proportion of the population that is older than 64 and younger than 15) of about 47% – which means that we have 1.12 people of working age for every 1 person who is not.

Population projections indicate that at the end of 2015 or into early 2016 there will be more people in Canada over the age of 65 than there are under the age of 15. Our average age is 41.7 years old and we are getting older.  Canada’s baby boom began in 1947 – our oldest boomers are about 16 months shy of turning 70. The youngest boomers, born in 1966 are turning 50 in 2016. The peak of the boom, born in 1959, will be turning 65 in 2024. Every year from now until then an increasingly large number of people will be leaving the workforce and there will not be as many new workforce entrants.

Today, 67% of all job openings in Canada require post secondary education and even though Canada is among the global leaders in higher education only 51% of working population between 25 and 64 have post secondary education. A major business concern expressed by Canadian CEOs is the challenge in finding and keeping the talent required for business success.

These factors

  • An unhealthy unemployment rate coupled with a significant number of vacant jobs;
  • The loss of knowledge and skills as the boomers leave the workforce and a smaller number of people who are and will be joining the workforce;
  • the gap between the proportion of jobs requiring post secondary education and people who are acquiring it;

indicate a need for every organization to develop and implement a strategic approach to workforce management.

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Strategic Employee Development

Every now and then my husband shares an HR related story, joke or news tidbit he sees with me.

The other day he shared this with me:

 A CEO, talking with her leadership team,  said, “we need to increase our education and training programs to ensure our staff have the best skills in the industry.” 

One of the team responded with, “That is going to cost a lot.  What if we spend all that money and the staff leave?”  The CEO responded with “What if we don’t and they stay?”

What struck me was the thinking behind the team member’s response.   That lack of understanding about the connection between development of people and achievement of business results is not unique, which brings me to the point of this commentary.   Employee development of all types needs to be one of the key strategies associated with business goals, and that strategy needs to have the same type and level of expectations for results as any other business strategy.

A good employee development strategy:

  1. Is directly aligned with both short and long term organizational goals
  2. Provides a long term objective for development across all work units and employee levels
  3. Is focused on shared employee and organizational needs
  4. Sets specific expectations for the employee development results
  5. Sets specific expectations for the business improvement outcomes
  6. Tracks the results achieved for all expectations
  7. Holds individuals and the organization accountable by evaluating improvement in productivity and profitability
  8. Celebrates success and starts again.

Of course, the risk that an organization’s well trained and skilled staff will attract attention from industry competitors is high and provides some good potential for upcoming blogs.

Interested in discussing this and other related HR topics?  Join me for the @CatalystHR Tweet Chat on Monday September 28 at 10 am (MST).

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The Mysteries of Technology

Today, for the second time in two days, I am wondering about what is most likely a completely basic matter with respect to technology use.  A  challenge for small practitioners who use external tech support services  for network and hardware support is the other tech support we need – where can we get the software and general knowledge support. So, here I am wondering about how to manage the new anti-spam compliance requirements and,  if this comment will show up in my own blog or in a blog I follow (yes I  really am a neophyte blogger!).  Tomorrow researching the bigger question.  Today – a simple answer – looked at the preview and sure enough, it appears on my own website.



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