Wednesday, 10 April 2013

The Vicious Cycle of Labour Turnover


The average cost of recruiting an employee in the UK is around £5,300, but this figure in itself is not particularly helpful. The actual cost can be as low as £1,500, but for a middle, or senior manager, it can easily cost well in excess of £8,000.

High rates of labour turnover are clearly expensive in terms of the actual costs of recruitment, but there are other – very significant - issues that need to be considered:

·      Lost production,
·      Increased production costs, for example the use of overtime to cover staff shortages
·      Increased costs of training replacement employees,
·      Loss of know-how and customer goodwill,
·      Potential loss of sales (e.g. if there is high turnover amongst the sales force), and;
·      Damage that may be done to morale and productivity, which is an intangible but potentially significant cost.

Combined with the costs of recruitment, all of these can have a major impact on the ability of your organisation to succeed in a highly competitive market.

One of the key areas of labour turnover can often be poor morale and low levels of motivation within your workforce. Unhappy employees often leads to conflict situations within your organisation and this can also be a very expensive issue to resolve.

The labour turnover cycle can often go round and round in a vicious circle of conflict situations, poor morale levels and ultimately increased turnover of staff and huge costs of replacing your team member.

There are a couple of simple remedies we suggest to avoid this scenario and help break the cycle of labour turnover:

Mediation

A great solution to workplace conflict - mediation is an informal dispute resolution process, facilitated by a third party trained mediator, aimed at bringing two or more parties together to clear up a misunderstanding, explore concerns, and help reach an amicable resolution. Many employees can be unhappy about jealousy over a promotion, have incompatible working styles or personalities or even opposing targets. Mediation can be a cost effective solution to resolving an employee’s issues, and potentially losing them.

Coaching

Coaching is a targeted, individual-focused solution which helps with organisational performance or development as well help towards personal objectives and can help with issues from leadership team development, performance, interpersonal skills and much more. Coaching can really help enhance working relationships and tackle behavioural and performance issues. It also optimises costs, due to the one-to-one arrangement and personalised format.

Training

If you need any help or advice on learning how to resolve your labour turnover issues, speak to us about our range of courses that are aimed at really nipping conflict in the bud and ultimately retaining your team. All our training is action-oriented and tailored to the organisation - by creating relevant case studies and activities, the delegates are better able to absorb and retain the learning material in the longer term. We can also provide pre and post course options to inform the training design and support delegates in translating the newly learned material back into their daily working lives.