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.

Successful mediations start with the right HR mindset. When was the last time you checked yours?

When conflict boils over in the workplace, it is tempting to quickly bring the parties together and point them towards a resolution. You can see how they need to work it out, ‘It is just a matter of telling them, right?’

No, not really. A more sensitive approach, based on our current knowledge of interpersonal relationships, usually gets better results which are more relevant to the individuals, and longer lasting.

Time and again, we come across well-meaning, but perhaps ill-advised, colleagues confusing informal HR meetings with mediation in its most valuable and effective form.
 Perhaps it is time for HR professionals and line managers to gain a better understanding of what mediation is, what it can do, when it should be used, and whom is best placed to mediate competently and without bias. After all, the way mediation is introduced into your organisation will shape the way it is embraced and embedded in your culture.

Once the relevant line or HR manager has learned of a conflict situation at work, they will probably want to sit down with each party to gain a fuller picture of the situation. There is much to be gained from these conversations, and one possible outcome may be to propose a mediation.

Problems occur when the meeting turns into the beginnings of a mediation of sorts, before the parties have been duly prepared and have an understanding of what is involved. There is also a risk that, in this context, there is a lack of complete impartiality and that professional mediation practice models are not being followed. This poses a significant risk to the credibility of the process and the way the parties are being supported.

Here are some of what we believe to be the core objectives of an initial needs assessment:

- Gain overview of concerns

- Establish the history of the issue/s to date and the people involved

- Understand what the parties are looking to achieve 
All of the above can, with the consent of the parties, feed usefully into a mediator's background knowledge of the situation, if indeed mediation is the most appropriate next step. 

People Resolutions provides independent conflict resolution services, including workplace investigations and mediation. If you’d like to talk through any situation, please don’t hesitate to give us a call on 01908 488 828, at no obligation.

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.

New Year memo to self - boost employee health and wellbeing

Christmas is coming fast and with it that annual angel/demon where you are already forgiving yourself for indulging two sizes in the wrong direction with the promise that starting Jan 1st you really honestly will do something about your health.

Of course, businesses do this too. They get to the end of the year, worked and at the moment increasingly partied out, and in the back of their minds they take stock and make very real commitments to making 2012 different, to focusing on improving the health and wellbeing of the bottom line.

Question is, is there a link? Between commitments to improving the health of your business and your own personal vows? I don’t mean, would your business survive next year if you had to be winched out of your bedroom by a crane in January (although that might do it). When I mean health, I also mean psychological and physical health. I mean would the wellbeing of your business be measurably improved if the business and you the employee (whatever your role) made it an explicit targeted measurable goal to make the business more healthy by making everyone in it more healthy?

Put it this way. What if your business sent you this email on Jan 1st:

Dear Max, (my dog’s name as it happens, but go with it)

Hope you had a really great Christmas and welcome back. To get things going – and staying – on the right track for 2012, we’ve decided to do things differently.

Firstly, we’ve decided that it is our business to create a working environment and give you a job that makes you healthy. That it is our business to care about your health and wellbeing, physical and mental. Not just in terms of nutritional food in the canteen, or improved crèche facilities, or marketing ourselves as a great place to work: we mean in the proactive removal of anything and EVERYTHING in your job negatively affecting your health and wellbeing.

So to get the ball rolling, we want to hear some very different New Year’s Resolutions.

• What health targets and plans and facilities we could offer that would make a difference to you (and your families)
• What things (people, processes, ways of doing things around here) that are getting in the way of making your job make you happy (that we can happily change)

Tell us – be honest - and we’ll tell you what we’ll do about it. As adults. Working together. In 2012, we’ll do our part – putting money and board air time where our mouth is – to make you smile when you come to work, to know that the work that you are doing here is the best work of your lives. If you want to work with us to achieve this, were with you all the way. The health of our business depends on it.

from HR

This is a little cheesy of course, but you get my point. Certainly much better than welcome back, can we meet to discuss your workload, cos we’ve got a shedload to get through.

For more on this, check out the free Collaborative Wellbeing – A People Resolutions New Year Manual.