Tag Archives: labour turnover

Using technology to predict leavers

pulled_in_two_directions_1600_wht_3783Once upon a time it was thought that employees who started taking more shirt-term absences from work were possibly thinking of leaving.

It was assumed that they were bored, disaffected, or going for interviews. When jobs were plentiful this group of employees were more likely to leave sooner rather than later. When jobs were scarce they hung on being disruptive through their absences.

Now, according to a report in The Times, companies such as Joberate are developing software using so-called “big data” to help them predict which employees are unhappy and likely to leave.

Indicators include opening a LinkedIn account, or spending Friday afternoons on twitter following other companies, or looking at job postings on FaceBook. But the state of the recruitment market and company performance can also be factored in.

Joberate compares an employee’s social media activity with a previous base-line and when it changes can notify the company, or a head-hunter, of the possibility that this person might be in the job market.

All the data they use is publicly accessible so can be accessed without the individual’s permission. Perhaps a stark reminder of being careful about what you put in the pubic domain.

However another software programme Workday uses internal company data such as promotions, management decisions, job cuts and satisfaction surveys.

Companies apparently think that once they have identified employees who might be at risk of moving they can intervene and persuade them to stay.

I’m not so sure. Once people start on activities such as LinkedIn job profiles they are already distancing themselves psychologically from their organisation (and probably more likely to take time off).

And usually people leave because of a poor relationship with their immediate boss.

One piece of research based on 32,000 Fortune 100 companies found that from the time an employee had a bad meeting with their boss it took only three months for that person to resign.

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Is working from home more productive?

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Marissa Mayer made the news when she banned employees at Yahoo from working from home.

Recent call-centre research by Nicholas Bloom at Stanford University  found that allowing staff to work from home over a 9-month period led to happier, more productive staff, with fewer leavers.

The company originally thought that productivity would drop but that would be offset by saving money on office space and furniture. In the event the home-based staff completed 13.5% more calls than the office-based staff.

The researchers thought that 1/3 of the productivity increase was due to a quieter environment with the remainder du to the home-workers working longer hours.

The home workers started earlier and had shorter breaks and because they weren’t commuting worked until the end of the day.

Sick days also plummeted (so more like self-employed workers in that respect).

It may be that because call-centre work is more robotic and easily measured that such big benefits were found. It might be different for creative or knowledge workers. And if there is low morale people might start slacking.

So was Mayer right to ban home-working? We don’t really know what the situation was at Yahoo but it generated negative publicity when she had a nursery built next to her office with an element of the Queen Bee syndrome.

Not everyone wants to work from home. It seems that younger people, whose social life often revolves around work, are less likely to want to work from home compared with older workers who are married with established families.

In the call-centre example the home-workers self-selected so might have been more motivated to start with. Some opted to go back into the office at the end of the 9 months and these turned out to be the poorer performers.

The biggest resistance appears to come from middle management who worry about losing control of people working remotely.

Perhaps the best solution is to let people work a couple of days a week from home, especially in bad weather or as in London when they held the Olympic Games. These could be mandatory days or on a rotation.

Main source: HBR January-February 2014

Should Managers be Held Accountable for Labour Turnover?

In the present economic climate should managers be held more accountable for labour turnover?

Turnover rates ran at between 6 and 9%, and almost 30% in London,in 2009 according to an IRS survey.

Just over half of employers believed the impact of  economic conditions had been to reduce turnover.

There is some survey evidence that many employees are just waiting for the recession to lift before they jump ship – and not for more money. A CMI survey found that 50% of employees are dreaming about exploring new career development opportunities including turning their hobbies into a business.

As recruiters will tell you: people join organisations but leave managers. So the turnover figures could be much higher if the job market was better and in the meantime disgruntled employees will take off more time and be less productive.

The surprising fact is that only 10% of organisations can put a figure on the cost of replacing leavers and they estimate the cost at around £550. This is a ludicrous under-estimate. I have an old Audit Commission report on labour turnover in the NHS which estimated the cost of replacing a qualified nurse at almost £5,000 back in 1995!

Now 1995 might seem a long time ago but times were hard in the early to mid-90s too. The Audit Commission research found that only half of the labour turnover could be accounted for by market conditions and the rest was due to differences in employment practices. Would it be any different today?

The report found that in many organisations there was an induction crisis. When staff were replaced they often left in the first year due to poor induction and management not managing expectations (or overselling the job).

It’s common knowledge now that the first 100 days are the key to succeeding in a new job.

The report went on to suggest asking staff why they were leaving and offering more family-friendly working conditions such as job-sharing and career breaks. Exit surveys and the other policies are now fairly standard, at least in large organisations, but have they actually had an impact on employee engagement? World-wide there has been a decline in employee engagement for the second year running.

Because this is not about employment practices per se but about how people are managed. Why are employees in family firms more loyal than in other sectors? Because they feel more valued among other reasons. Companies bucking the trend in having engaged employees listened to employees and took action.

Managers have the prime responsibility for keeping staff engaged and motivated, even in difficult times. That’s what makes a good manager isn’t it? Unfortunately there are still too many ineffective managers. The CMI thinks that ineffective management is costing UK businesses more than £19 billion in working time lost through ineffective management.

Amongst the worst practices are poor communication, lack of support, micro-management, lack of direction, and discriminatory and bullying behaviour. Companies bucking the trend in having engaged employees listened to employees and took action.

And the most effective managers inspired confidence, recognised staff contributions, gave staff challenging work to do, and showed a sense of responsibility to employees and their community.

So if your organisation thinks it hasn’t got a turnover problem now, or that it can exploit employees who are in fear of losing their jobs and can’t get another at the moment; think about what you are doing. Times will change, good staff will leave anyway, less marketable employees will stay and be unproductive or even sabotage your business.

CMI research suggests that 50% of employees are thinking about exploring new career opportunities, many wanting to turn hobbies into businesses.

The same survey showed that 2 out of 3 people are “gripped with fear” over job security.