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.

The ‘root’ to resolving workplace conflict - an insight into our process

The root to resolving workplace conflict

Every first phone call we receive from a client organisation paints an individual problem scenario of workplace conflict. And while there are unique aspects to each situation, many will share common themes that help guide us along the appropriate route to resolution and closure for all stakeholders.

A return to work clouded in anxieties, interpersonal clashes within a whole team, an under performing manager - all of these could be perceived as being ripe for mediation. But conflict has roots, often buried beneath the surface, which can make an immediately obvious solution hard to spot.

Mapping the conflict picture

The key is to try and map the ‘conflict picture’, complete with roots and branches, to indicate which interventions will work most effectively and in which order. We also look at risks (such as imminence of a grievance being raised or a person leaving) and what is the end goal we want to reach. This isn't to say that all workplace conflict can be ‘solved’ in a scientific manner - we’re dealing with people here - but it certainly helps gain a handle on the situation.

For example, if there is a fallout within a group of employees, it is worth examining whether there is a line management issue underneath, or perhaps a hotspot between two individuals that is causing others to take sides. Informal one-to-ones with each member of the team can go a long way to making everyone’s concerns feel heard and to pinpoint the conflict anchor.

By taking things a level deeper, it may become obvious that conducting a group mediation ‘cold’ might not be the best approach; it could be better to mediate between two people at the centre, and/or provide some coaching or training for the manager to take ownership of their team’s respectful co-worker behaviour. When all the pieces are in place, in the right order, the situation can be brought to a close for everyone to move forward.

In this way, mediation becomes one of many tools available to employ at the appropriate time. Training, either before or after a conflict situation, is very effective in moving towards a culture where tensions are addressed early (and therefore do not require costly time and resource to handle), and where mediations and investigations are carried out by competent internal individuals.

We have over 20 years expertise in helping organisations with workplace mediation, investigations and training, using our network of UK wide specialists. If you have any conflict questions, or a current case or would like to speak to us about, we’d be happy to hear from you. Contact us at information@peopleresolutions.com 

What your staff survey isn't telling you about workplace conflict

On a daily basis we’re talking with organisations about their employee issues, and one particular HR concern crops up time and again: Based on the annual number of formal grievances and complaints alone, the business could believe it has relatively low levels of conflict, while the staff engagement survey results indicate high levels of reported bullying and harassment. The apparent mismatch between the two metrics understandably makes it difficult to gain an accurate picture of conflict, the consequences of which can be very costly.

Letting ‘ground level’ conflict fester - which can easily happen when HR are often the last to hear about such situations and therefore can’t help diffuse it any earlier - can result in hotspots of tensions and resentments between two or more employees that can impact productivity and engagement within whole teams if left unaddressed. And at the other end of the scale, having to resort to more overt and formal measures such as mediation and investigations also require a financial investment that can get out of hand.

The key to minimising the cost of conflict and the disruption it brings lies in:

a) Getting a full and accurate picture of your conflict in all forms at at all levels, and;
b) Educating everyone in the business about how conflict is caused, how to avoid it in the first place, and how to handle it sensitively and effectively if it does occur.

In a previous post we talk about ‘nipping conflict in the bud’ with training that helps individuals recognise their own and others’ social style and encourages healthy, positive working relationships. We firmly believe that getting a genuine handle on conflict requires a cultural commitment to understanding conflict and being accountable for keeping it to a minimum by all members of staff.

We recently ran a Group Conflict webinar related to the themes in this post – click here for the presentation slides.

Who’s leading the way towards Collaboration?

Earlier this week we were informed of new research from the Chartered Management Institute (CMI) and Penna that “Over four in ten managers (43 per cent) consider their line managers to be ineffective.”

Whilst this is shocking in itself, it won’t come as a surprise to many HR professionals in the UK.  A large proportion of conflict that we deal with at People Resolutions stems from poor communication – most likely between line managers and employees.

The research also found a strong link between line manager effectiveness and business performance: “Only 39 per cent of managers in low performing business thought their line managers were effective, compared to 80 per cent in high performing organisations”.

People Management Training as a whole has been around for years – but is it working?  This research would suggest not.  However, this brings the fore the importance of leadership to an organisation.  Can a workforce ever truly be 100% effective if the leadership isn’t?

As part of our 2012 mission help organisations move from conflict affliction to collaborative performance, we must also address the question of who leads such a move in organisational culture. With workplace conflict currently costing UK businesses over £24 billion per year, the drive to minimise conflict and move towards a more collaborative culture is more important than ever.  As will all substantial shifts in organisational culture we believe that this should be lead from the top.