Comparative Analysis of Factors driving Employee Turnover and Identification of Best Practices for Retention in Information Technology Enabled

Services (ITES) organizations Presentation Transcript

1. Comparative Analysis of Factors driving Employee Turnover and Identification of Best Practices for Retention in Information Technology Enabled Services (ITES) organizations of Oklahoma City (USA) and Bangalore (India) Vidya G. Singh G Bangalore 2. Statement of Problem: Managing employee turnover is a key concern in the ITES sector globally p y g g p Costs to recruit and train new employees have a significant eroding impact on bottom lines of organizations in this sector There exists a need to investigate the need for a differentiated strategy to address this challenge at a g g global level Purpose: Gain a global perspective to, Investigate causes for turnover Review retention strategies and success stories 3. RESEARCH METHODOLOGY Survey Instrument- Questionnaires and face to face interviews Instrument capturing subjective & objective data Respondents HR Managers p g Survey Site 5 ITES organizations in OKC (US) and 5 ITES organizations in Bangalore (India) Inputs - Primary Data & Secondary data Application - Content Analysis & Correlation studies 4. TOP REASONS FOR TURNOVER Oklahoma City 6% 6% 17% Attendance Problems Work Time Schedule 6% Job Monotony 6% Family Issues 17% Post Disciplinary Action Post Disciplinary Action 6% Higher Studies 6% Mismatch of Expectations Relocation 12% 18% 8% Merger & Acquisition g q Bangalore City 6% 6% Higher Studies 21% Better Prospects 6% Relocation 6% Better Salary Competition 11% Change Industry 22% Work Time schedule W k Ti h d l Attendance 11% Health 11% 5. THE TOP UNCONTROLLABLE REASONS FOR TURNOVER Oklahoma City 10% 10% 30% Job Monotony Night Shifts Absenteeism 10% Relocation Family Issues Merger 20% 20% Bangalore City Bangalore City 9% 9% 28% Competition Relocation Higher Studies 9% Night Shifts Absenteeism 9% Health 18% Family Issues F il I 18% 6. TOP RETENTION STRATEGIES Employee Surveys Oklahoma City Focus on Good Work Culture 7% 12% Educate Managers on Impact of Turnover 13% Career Development Programs Paid Vacations for High 13% Performers Retention Meetings with 7% employees Abolish Call Handling Time Abolish Call Handling Time Compensation 7% 13% Recognition Programs 7% Relationship Management 7% 7% 7% Gift Certificates Bangalore City B l Cit Employee Engagement 8% Good Compensation 15% 8% Good Work Conditions Recruit the right people Recruit the right people 8% 15% Performance Improvement Programs Employee Surveys 8% Brand Image 8% Rewards & Recognition 15% Gift Certificates 15%

7. CORRELATION STUDY RESULTS Oklahoma City : Most Correlated Parameters Bangalore: Most Correlated Parameters Sl. No. Parameters Correlation Sl. No. Sl N Parameters P t Correlation C l ti 1 Percentage of male employees 1 Average pay versus Turnover versus Average length of employment 0.8535 0.85184 2 Average age versus Average 2 Percentage of Female Employees Length of Employment Versus Average Length of Employment 0.772756 0.851841 3 Reported Turnover versus Actual 3 Reported Turnover versus Actual turnover Turnover 0.913466 0.982073 Oklahoma City : Least Correlated Parameters Bangalore- Least Correlated parameters Sl. No. Parameters Correlation Sl. No. Parameters Correlation 1 Average Age versus Average Pay 1 Average Pay versus Turnover -0.04972 -0.01839 2 Percentage Pay Increase versus 2 Percentage of male employees Average Length of Employment versus T Turnover 0.061752 3 Percentage of women employees versus Turnover 0.18874 -0.06175 8. CONCLUSION "There are fundamental differences in the way employee turnover There needs to be dealt with in different parts of the world. Global companies cannot have a one size fits all approach to deal with turnover and will have to differ their strategy based on the ith t d ill h t diff th i t t g b d th socioeconomic context of the market they operate in" FINDINGS The causes for Turnover are different in different geographies. As a result the strategies to be adopted to address turnover will defer across geographies. Therefore global companies cannot adopt a one size fits all approach. approach

ABSTRACT The phenomenon of turnover in the field of nursing in a long-term care facility is investigated and analyzed for the implications concerning the effects employee turnover has both monetarily and on the quality of patient care. The projected costs incurred by the facility due to each turnover ranges from 53% to 64% of the salaries for nurse and nurses aides. However, values are considered minimums as addition of benefits, longer vacancy times, and more training expenditures could easily add 10 to 20% more to the turnover costs of nursing personnel. While inference from previous studies exhibit that a negative relationship exists between turnover and level of patient care, no such conclusive relationship was confirmed for the nursing facility. Further literature review investigates the common models suggested by previous research and reviews the most currently accepted causal agents of employee turnover. Job satisfaction is examined and identified as the most accurate measure of predicting employee turnover. Finally, recommendations for the strategic management of turnover by health administrators and nursing managers are outlined. 3

EXECUTIVE SUMMARY The phenomenon of turnover in the field of nursing in a long-term care facility is investigated and analyzed for the implications concerning the effect employee turnover has both monetarily and on the quality of patient care. The name of the nursing facility examined is withheld due to specific organizational policies on release of information. Therefore, all future reference to the facility will be as XYZ nursing home. This study focuses on a single 186 bed skilled nursing facility that employs the full-time equivalent of 32 RNs, 15 LPNs, and 82 Aides. For this investigation, the term nursing personnel is used to refer to all RNs, LPNs, and CNAs employed by the nursing home unless otherwise specified. The turnover of nursing personnel, as calculated from human resource records, was found to be 115% for the year 1999. This trend has increased during the present year as exhibited by the 80% turnover of nursing personnel during the first six months of 2000. For this facility, the expected monetary value to replace one of these full-time employees was calculated to be from $9343 to $18,193. These values are well above the national average, however, the cost to replace direct care workers in nursing is usually calculated well below actual values. This is due to the fact that up to 80% of the cost to replace employees is spent for indirect or hidden costs (Phillips, 1990). These hidden costs include; incoming employee inefficiency, departing employee inefficiency, cost of the position while vacant, and inefficiencies of those employees associated with both the entering and exiting employee. 4

Inference from previous studies exhibit that a negative relationship exists between turnover and level of patient care. Basic observation of patient care levels in this study were inconclusive, but many incidents of insufficient staffing occurring within the facility exhibit that the level of patient care was most likely compromised. This was supported by such factors as increases in number of patient falls and increases in resident concern forms filed during times of highest turnover. Observations also identified that as employee turnover increased for XYZ nursing home, or was at least openly an occurring problem, that patient census levels within the facility also suffered. Further analysis investigates the development of employee turnover models by the researchers Price (1977), Bluedorn (1979), and Abelson (1986). Previous literature and reviews are also examined to determine the most currently accepted causal agents of employee turnover. The causal agent identified as job satisfaction is exhibited to be the most accurate measure of predicting employee turnover. Finally, recommendations for the strategic management of turnover by health administrators and nursing managers are outlined. Three key factors including individual characteristics, environmental characteristics, and organizational characteristics are discussed for causal relationships with employee turnover and techniques best used by administrators to control such turnover. Table1. Stages of the Turnover Process
Stage 1: Stage 2: Stage 3: Stage 4: Initial Conflict Phase Intensifying Phase Separation Resolution Time Six months to eight Two months to six Resignation to Two months to one Frame months prior to months prior to leave taking year after leave-taking. leave-taking leave-taking Descripti Initial development of Emotions intensified Relief experienced Resolution of on confusion conflict and tension rapidly with some when decision in personal values, related to the job. reaching a near-panic completed. anger, grief, guilt and state. bitterness associated with resignation. Emotional and Guilt and/or grief behavioral self-control developed present. Behavior-directed Behavior-exaggerated Behavior-many nurses toward tension but directed toward unable to visit former release and conflict relief of tension and workplace and resolution conflict. co-workers. Administrative Intervention Accepted Yes Minimally No ----(88%) (23%) (100%)

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Youre growing your small business and putting in extra effort to expand your workforce. But just when youve successfully hired top sales people, your most dependable counter helper jumps ship. Or what happens when staff at your retail store turns over at an annual rate of 100 percent or 150 percent or even 200 percent? Those costs multiply to a total that can decimate profits and even put your business in jeopardy. Make no mistake: Employee turnover is expensive. Beyond trying to treat your employees fairly and provide a pleasant work environment, what can you do to motivate employees and keep top performers? The first step is to assess the real costs of employee turnover and then use this analysis to rationalize your investment in workforce planning. But how can you even begin to enumerate the costs of losing an employee, weathering the vacancy and bringing on a new worker? List out all the consequences of a person leaving a specific role, and come up with a dollar figure for each, says Shebani Patel, a director at Saratoga, the human-resources management practice at PricewaterhouseCoopers. Delineating Employee Turnover Costs In the spirit of gauging the magnitude of turnover costs, here are items to consider, with annotations, to put these expenses in context. Put a number on every item that you can and youll get an idea of what employee turnover is costing you -- and how much you should put into in workforce planning and retaining your top employees. Exit costs. Time and resources to hand off projects in progress; customers lost due to sloppy handoffs; unemployment insurance; lost knowledge of your business and industry contacts; final payroll and benefits administration. Its easy to dismiss the cost of employee termination, but dangerous to simply hand their worker her last paycheck and show them the door. Someone has to fill out the paperwork and make sure its all done right, says Johnny Laurent, vice president and general manager for Sage, which sells small-business software. You might not think about it until you get sued the first time. And dont underestimate the knowledge and relationships that the worker departs with, which can be even more important to a small-business owner than to a middle manager at a large corporation. Vacancy costs. Loss of productivity; costs of work covered by other employees (including overtime), temps or contractors; client dissatisfaction or loss resulting from any botched handoffs.

Employees are created unequally when it comes to the effect of their absence on your bottom line. The cost depends on how much the departing employee was involved in bringing in business, says Jeanne Brutman, a New York financial planner and advisor to small businesses. And when it comes to the effects of the vacancy on the bottom line, remember to tote up the credits as well as the debits. Dont forget your savings from not paying benefits during the vacancy, says Laurent. Recruitment costs. Advertising; time to review resumes; conduct interviews; reference checking, background, criminal, credit and drug checks; skills and personality assessments. Business owners tend to emphasize hard costs, such as those they incur when they pay an invoice for an online job posting. But soft costs -- like the time interviewing for retail sales positions with three-digit annual turnover -- can be just as real, and large. Onboarding costs. Benefits enrollment and other paperwork; training time for new hires and their trainers; reduced productivity of new hire during ramp-up. The onboarding process is not just about handing the new employee an apron or a shrinkwrapped waste basket filled with office supplies. Getting an employee up to speed can be a substantial cost of doing business. If you have to replace someone, it could cost you tons to get the new employee to the point where a rainmaker was, says Mitch Roop, a consultant to small businesses in Tampa, Fla. And the loss of a good salesperson is as potentially damaging to a cleaningsupplies vendor as to a boutique Wall Street firm. On the other hand, some changes in your workforce might yield large savings. For example, if youre able to reset salary to entry level, you could reap big payroll savings from the turnover. And if you hire a younger worker, your health insurance premiums may go down -- but beware of age discrimination. Granted, many of the costs of employee turnover, while undeniably real, are difficult or impossible to pin down. But dont let these uncertainties discourage you from calculating what you can and investing proportionately in hiring and retaining great employees.