The True Cost of Turnover?

February 19, 2018

As unemployment declines, turnover increases in every industry, but industries where shiftwork is most prevalent seem to get hit hardest. Employees that are left behind have to work harder – and sometimes longer –hours to make up for the open positions. As overtime increases, I have seen multiple instances where managers and supervisors make it worse by promising to get employees home early only to hold them late, call them in early, or require them to work a day off. Pretty soon, employees are hearing complaints from home that they are never home. If this continues, employees often look to change jobs just to get a better schedule.

 

It seems that every one of my clients in the last year is dealing with this as their number one issue.  An employee making $15 an hour can cost as much as $30,000 to replace. I find that a lot of people just don’t realize the total impact of losing an employee – especially a good one. The turnover they are experiencing is costing even more than they know. There are the obvious costs of severance pay, vacation payout, recruiting costs of filling the vacancy, and the hours of training for new employees.

 

A new employee, however, brings with them a number of hidden costs. Not everyone learns at the same rate, there is a loss of productivity from employees assigned to do on-the-job training, and new employees are not as productive as fully trained employees. Often times, when turnover happens, internal turnover also begins to increase as more experienced employees transfer into vacancies and people move away from undesirable shifts (primarily from night and evening shifts to day shifts or Monday through Friday schedules). Skill gaps localized to a single department can absolutely destroy the productivity of not just the department but of other groups relying on their effort.

 

Did you know that your night (or any off shift) should be able to easily outperform your day shift? When I see a night shift that is just keeping pace with a day shift I know there is a skill gap. Think about what typically happens – engineering projects, training, facility tours, changeovers all happen more often on the day shift. Generally, the night shift is being “set up to just run.” Imagine how much money your company can save if your night shift is outproducing your day shift by 5, 10, or even 20 percent? I’ve seen differences this big when the night shift is equally skilled as the day shift.

 

Imagine that instead of being worried about employees leaving the off shifts for a day shift, day shift employees can’t wait to move into the next opening on a night shift. It happens. I remember one large employer in northern Minnesota that implemented a new rotating schedule in the production facility. They had to stop Monday to Friday day shift employees from signing up for the job after many of them submitted requests to transfer into those production positions to work the rotating shifts they considered “a better schedule” than the day shift.

 

 

 

 

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