Employee Management Archives

What Is Employee Turnover and Why Does It Matter?

Employee turnover, or employee turnover rate, is the measurement of the number of employees who leave an organization during a specified time period, typically one year.

While an organization usually measures the total number of employees who leave, turnover can also apply to subcategories within an organization like individual departments or demographic groups.

What Is Employee Turnover?

In the context of human resources, employee turnover is the act of replacing an employee with a new employee. Partings between organizations and employees may consist of termination, retirement, demise, transfers and resignations.

An organization’s turnover is measured as a percentage rate, which is referred to as its turnover rate. Turnover rate is the percentage of employees in a workforce that leave during a certain period of time. Organizations and industries as a whole measure their turnover rate during a fiscal or calendar year.

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If an employer is said to have a high turnover rate relative to its competitors, it means that employees of that company have a shorter average tenure than those of other companies in the same industry.

High employee turnover may be harmful to a company’s productivity if skilled workers are often leaving and the worker population contains a high percentage of novices. Companies track voluntary turnover more accurately by presenting parting employees with surveys, thus identifying specific reasons as to why they may be choosing to resign.

How Do You Calculate Employee Turnover?

In order to calculate your employee turnover, follow the steps given below

Step 1 – Divide the sum total of the number of employees that leave within a particular period of time (month, quarter, year, etc.) by the average number of employees that work within the selected time frame.

Step 2 – Multiply that number by 100 to calculate the employee turnover rate. i.e.

Employee Turnover = (Total Number of Employees that leave within the time period / Total number of employees that work within the time period) x 100

For example,

if you have an average of 150 employees working during a month’s time and 30 employees leave,

your turnover rate can be calculated by following the above mentioned formula

(30/150) x 100 = 20%

So the Employee Turnover rate of the company is 20%

Note – while calculating this turnover do not include temporary hires or employees who go on temporary leave in either factor of the equation. Incorporating these kinds of temporary shifts in workforce numbers will skew your turnover rate higher than it really is.

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Why is Employee Turnover a Problem for a Business?

Employee turnover is one of the grossest problems in today’s cutthroat IT talent marketplace. Unfortunately, many businesses have no one but to blame themselves for high employee turnover rates.

Employee turnover rates tend to shoot up when the economy is at its peak because IT professionals tend to be more confident in higher pay, or cultural fit. Employee turnover rates have become a constant headache for hiring securing a better job, managers, talent acquisition experts, recruiters, and HR professionals.

Often a high employee turnover rate costs businesses loads of finances in lost resources, productivity, training, and recruitment. Worst part: high employee turnover rates lead to an increase in the number of dissatisfied employees and remember that disgruntled employees can throw your business off the track completely.

Reasons which cause ET and Ways to Reduce it

Many organizations have discovered that Employee Turnover is reduced significantly when issues affecting employees are addressed immediately and professionally. Companies try to reduce Employee Turnover rates by offering benefits such as paid sick days, paid holidays and flexible schedules.

Here are some of the common reasons that contribute to Employee Turnover and some ways in which they can be tackled-

Time to pay heed

Studies continuously have shown that a staggering number of IT organizations are failing to make efforts when it comes to defining expected job timings, bettering infrastructure, etc. Employee retention in the volatile IT talent market is very challenging these days.

Whilst some organizations do have programs and policies in place to curb attrition rates, most of the efforts turn out to be uninspiring and dull. So it’s time to pay heed and learn from the mistakes of yesteryear. This is the reason employee retention is more important than ever for HR in 2021.

The ‘X’ factor

Whilst a majority of business managers and HR leaders cited compensation as the key driver for attrition, there are various other aspects to make an employee stay or quit.

For instance, employees expect a perfect work-life balance, vacation time, benefits, perks, culture, career development/growth, etc. Unfortunately, there are several loopholes when it comes to IT professionals’ awareness towards the benefits packages and programs which if bridged can improve retention rates significantly.

Though there may be programs and packages in place for addressing the attrition problems, these are not properly communicated to the employees. Communication is a severe problem with most of the IT organizations.

HR managers and business leaders may believe that they are putting in all they can to retain the best talents, but unfortunately, all these efforts might not actually be reaching the target employees. Thus, communication is one of the must-have HR management skills in 2021 to mitigate turnover problems.

Remunerate competitively

Remuneration is imperative and businesses ought to ensure that they pay their employees competitively that is in line with the industry and market considering cost of living and to curb job-hopping. A competitive salary is a must and IT hiring professionals must have a thorough understanding of the tech market’s demand and supply for IT skill sets to reduce the employee turnover rate.

Remember that you are not only competing with other IT organizations for talents, but you are also competing with all those organizations that are recruiting for IT skills. Thus, compensation ought to be competitive besides growth opportunities and career development.

Conclusion

IT organizations ought to accept the fact that attrition is real and work accordingly to implement robust programs and policies in place that go beyond compensation. Failing to understand this grim reality may trigger the need to reboot your entire workforce planning strategy.

Therefore investing time, money and efforts in catering to the needs and comfort of employees must be on the priority list of managing a company.

What is Succession Planning and Why is it Important to Organizations?

Succession planning is a way of ensuring that your business stays on track by analyzing the backbone of your venture i.e. your employees. Some of the many benefits of succession planning is that it lets ambitious, less-experienced internal candidates know their hard work and skills have been noticed and appreciated enough to be considered for advancement.

It can be an incredible retention tool and motivator for junior managers and subject matter experts who want to advance their careers into management.

In this article we will talk about the meaning of succession management, its benefits and the process of formulating an effective succession management plan.

What is Succession Planning?

Succession planning is a strategy for passing on leadership roles—often the ownership of a company—to an employee or group of employees. Also known as “replacement planning,” it ensures that businesses continue to run smoothly after a company’s most important people move on to new opportunities, retire, or pass away.

Succession planning involves cross-training employees so that they develop skills, company knowledge, and a holistic understanding of the company.

Why is it Important to Organizations?

The purpose of succession planning is to make sure a company always has the right leaders in place should a change happen quickly. By failing to create an orderly plan for succession, your company may not get a second chance if it doesn’t adapt immediately after a key player leaves the company or passes away.

After all, you can’t anticipate when a serious illness, accident, disaster or pandemic will strike, but you can prepare for what will need to be addressed should one happen.

The Benefits of Succession Planning

Disaster-proofs your business

You buy insurance to protect the company from hurricanes, floods and fires. You install security systems to defend the company from theft. And you back up data to an off-site location to safeguard your business’s proprietary information.

Many business owners get so busy with the day-to-day operations of their company that they fail to make succession planning a priority. These leaders may think they’re too young to be hit with a serious illness. Or they forget that a key player (or several) could be lured away by another company that needs their skills and is willing to pay top dollar for them. Any of these scenarios can leave a business uniquely vulnerable.

Creates structure for training and development

Some of the employee’s professional development may come in the form of coaching, mentoring, job shadowing or a gradual increase in more advanced responsibilities. Other positions may even require the candidate to go back to school to get additional education or professional certification.

By tapping potential successors early, you give employees time to acquire the skills and experience they’ll need to perform well in their senior roles. You also let employees know that you’re willing to invest in their growth as well as the company’s.

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Keeps extra eyes on a job

Once your top prospects are being groomed, your company has a chance to reap perhaps its best tool to grow and thrive. This happens when a junior manager is sitting and talking with their senior leader about why they’re doing things a particular way.

The simple process of explaining the status quo helps reveal weakness in processes and procedures, uncovered sales opportunities and opportunities for positive change. This natural process allows your company to keep an extra set of eyes on its senior roles and encourages questioning of the corporate norms that may have become dated or inefficient.

In this way, succession planning results in future-proofing your company. Conversely, when retiring employees leave, they can act as a sounding board for questions and concerns, troubleshoot customer problems and more. This helps to smooth the transition.

Maintains brand identity

You frequently hear news of CEOs who come into a company from the outside with great promise, only to fail in a short time. Sadly, such disastrous hires often damage the company’s reputation and long-term growth along with them.

This usually happens because the outsider CEO doesn’t understand the fundamental values and mission of their new company because they haven’t “grown up” in it, so to speak. Wanting to put their own stamp on the business, or failing to grasp customer needs, they move the organization away from its core brand.

The benefits of succession planning is that it helps your company avoid this. By identifying and grooming an internal successor, your company ensures it will be led by someone who shares its values and deeply understands the company’s brand promise, its customers and its employees because they’ve lived it themselves.

Helps the company plan for the long-term

Change happens fast. When your company knows where it’s going, your team can plan for the future. If you position succession as part of your company’s overall growth plans, you create a path for retiring employees to hand off their years of hard-earned knowledge and transition important working relationships before they leave.

The objective of a succession plan is to help your company grow with intent as you identify and build plans for vulnerabilities in other areas of the business. Other benefits to succession planning may include providing help in ascertaining which areas require innovation, setting realistic goals for growth and planning for future talent needs that may result from that growth.

How To Develop A Succession Plan?

Review Plans & Identify Key Positions

It is mandatory to review the strategic plans and objectives of your organization. The first step in succession planning is to identify current or future key positions or groups in the organization. At this stage identifying key positions thoughtfully should be your only focus rather than candidates.

Listing The Competencies

All positions require a particular set of skills, abilities, and knowledge. Therefore, find and list the employees who are perfectly suitable for the corresponding job role. One way to list the competencies is to review relevant merit criteria and job description for the associated position and interview current and former job incumbents.

Identifying Potential Candidates

This step of succession planning is similar to that of general job recruitment practice. But the succession planning process goes one step ahead by helping candidates who show great interest in developing the requisite skills for the particular position. Helping and mentoring these candidates prior to the formal recruitment process that begins once, a position becomes vacant.

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Development Plans

Once you’ve found the relevant candidates suitable for the role, based on their potential for success and interest in a key position, the organization should ensure that these employees have access to development opportunities and learning tools.

Implementing The Process

The final step is to implement and evaluate the process. You have to plan the activities and inputs you have to make to get the desired outputs. Every step in this process has to be evaluated to measure the success and progress of the plan. It is essential to monitor the efficiency and effectiveness of the succession plan once it has been established.

Conclusion

Succession planning is a receptive decision by an organization to nurture and promote the continuous development of employees, and to make sure that the key positions in the organization maintain some measure of stability, thus enabling an organization to achieve desired business objectives.

Succession management is all about knowing the goals of the organization and its employees and improving the capacity to address emerging issues that will affect the business in the long run.

What is Employee Engagement and Why is it Important?

What Is Employee Engagement and Why Is It Important?

The current work culture involves much more than merely focusing on numbers. HR is understanding the importance of Employee Engagement and working towards the creation of an active workspace.

In this article we will discuss Employee Engagement and how it benefits any enterprise.

What is Employee Engagement?

Employee engagement refers to the extent of how much an employee feels passionate about their work, is committed to the organization, and understands their job role.

Employee engagement surveys provide organizations with valuable information that helps them know if employees are involved or separated from the overall functioning of the workspace.

How Does Employee Engagement Differ From Job Satisfaction?

Employee engagement takes place when the employees are dedicated to helping their company accomplish all its goals. The actively involved employees are encouraged to demonstrate daily performance and do their best to help their companies thrive.

For example, some employees provide evident work results and constantly develop ideas, work plans, and work output that enhance the company’s overall performance.

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Employee satisfaction refers to the condition when an employee enjoys their job but is not involved in it.

For example, you might come across employees who show up to the office on time and complete their work hours, but their work output is not satisfactory.

Why Is Employee Engagement Significant?

When a company comes up with a constructive work strategy, it motivates employees to engage more actively with their projects. Employee engagement further promotes practical work and invites better talent and ideas to the work system.

Discussed below are some of the reasons that highlight the importance of Employee Engagement-

More Employee Engagement yields better work output.

Numerous surveys conducted to analyze the impact of employee engagement clearly indicate that employees who are devoted to their job roles tend to be more prolific than those who are not. You must look for different ways to engage your employees. You can come up with challenges, responsibilities, and even healthy competition to motivate employees to improve their work and step ahead in their performance, creativity, and output.

Employee engagement nurtures customer satisfaction

People who love their work are ideal people to communicate with customers. The most committed employees are more invested in ways to translate good communication to increased sales. When an employee is engaged with their job role, they feel valued and pose a positive persona that benefits both the workspace and the customers.

Employee engagement enhances corporate culture.

When people are constantly engaged with their work, they understand the technicalities behind it and address the importance of their work and the contributions of their colleagues.

An office space with actively participating and interested employees is a healthy workspace that has the potential to gain impeccable results and boost company performance. This environment attracts good talent and presents a positive example for newly hired employees.

Better Employee Retention

Employee turnovers are costly affairs. Hiring a new employee includes numerous hectic processes like shortlisting resumes, conducting interviews, and on-boarding employees. It not only consumes capital but also requires time. Disengaged employees are more likely to opt for better offers or leave their job due to a lack of interest. It is therefore essential for companies to look for ways that promote employee engagement.

Employees engaged with their work are more likely to stay back and communicate with their managers in case of queries related to their increment or scope of promotion. Companies that work on maintaining employee engagement have a better shot at retaining their top talents. This employee retention saves them from the hectic process of employee turnover and allows them to save their talented employees and form a better relationship with them.

How Can You Improve Employee Engagement?

Now that we are aware of the importance of employee engagement let us discuss some ways that will help you improve employee engagement at your company :

Pay attention to the crucial areas

You need to focus on areas that require more attention. Once you start planning against the overlooked challenges, you will have a better framework for coming up with engagement strategies.

Every company consists of different work departments. Every department is vital for the company’s overall functioning, but there are still some areas that impact it the most. You need to review the crucial areas that directly affect your company’s performance and transform the existing work system into a more engaging discourse.

Active Communication

Active communication is the basic necessity of every workspace. You must invest time in communicating with your employees, addressing their problems, asking for their suggestions to improve engagement, and keeping them involved in the process of forming new strategies and work plans.

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Conclusion

Keeping employees engaged with their work aligns them with the company’s goal and their role in achieving the same. Hence, it is essential for company admins and managers to constantly administer their workspace and come up with improvements that bring in more engagement.

How Upskilling Your Team Benefits Your Organization?

Smart organizations can alleviate some of their basic financial pains by investing in tenured employees to retain them in the organization. Stellar employees, the ones with great morale and high productivity, can be hard to come by and organizations understand the benefits of finding ways to retain these individuals. To create a better workforce companies are exploring the question – How upskilling your team benefits your organization?

There are numerous successful companies that invest in the process known as upskilling to help retain current employees and brush up their skills for the greater benefit of the organisation.

What is Upskilling?

Upskilling is the process of teaching current employees new skills. This enables the employees to move into bigger and better jobs in the organization.

Investing in upskilling employees pays off in the long run, as the company saves money on hiring new associates and boosts the morale of tenured employees at the same time.

How Does Upskilling Benefit Your Organisation?

It may seem like a good idea to train your people and help them move up the corporate ladder, but it’s more than a noble concept.

There are specific benefits you will reap from upskilling the workforce:

Employee Retention

Employees who are challenged to develop and grow are often the happiest ones at an organization. If your company works to retain tenured employees, it will prove that you are making a solid investment in the people, which is sure to boost morale and productivity. Employees who are challenged to grow outside of their roles tend to get excited about what might be around the corner for them.

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Customer Satisfaction

If you have happy employees, you are far more likely to have happy customers. Content employees are typically more invested in the company, they promote the corporate brand within the organization and to your customers. Typically, happy customers tend to be loyal customers as well.

Save on the process of rehiring

It is expensive to lose and replace tenured associates. You are losing the investment you made in the current individual, not just because of any talent development you paid for, but also because when that individual leaves, they take all their knowledge and experience with them.

Now you have to pay not only to advertise the new role, for the recruitment process, the time it takes to interview candidates, any hiring bonuses that new individuals may require and also the time it will take the new individual to ramp up into the new position. Simply losing one employee can be a hit on the bottom line.

Upskilling Strategies

In order to create robust upskilling in your organization, you will need to devise a strategic plan. Having a strategy will help you to get buy-in from leadership within the organization and also from the employees themselves.

Personal Development Plans

Encourage associates to build a Personal Development Plan that includes competencies that they want to improve upon and skills they want to gain. Empowering your employees to come up with their own plan is key to the success of the upskilling training program. Employees can identify new skills and competencies that resonate with them as opposed to being told what they need to learn.

Allocate Time During the Workday

Once your employees create their individual development plan, allow time during the workday for employees to upskill. Perhaps you have an employee who wants to take a communications course. Allow them to leave early to attend class or provide time and a quiet space to take the class online.

Job-Specific Upskilling/Credentialing Programs

Offer your employees job-specific training to enhance their current skills. For example, you may have specialty software used by only a small sector of your organization. Consider offering upskilling training on the software to employees in the company who may be interested in learning more about it. You may also consider offering credentialing programs, meaning training that results in a professional certificate.

For example, you may have instructional designers on your team who would benefit by enrolling in an intensive E-Learning Certificate program.

You may be looking at the expense of upskilling training and decide it isn’t worth the investment. But it doesn’t have to cause a tremendous financial setback. You can upskill employees on a shoestring budget if you get creative. There are many ways to reskill corporate learners using a classroom setting, online learning content, or using your current employees to assist in creating upskilling training.

How to Implement Upskilling Training?

Classroom Training

Trainers can conduct upskilling classes in a classroom setting, allowing employees to learn new skills or enhance current ones. For example, companies may detect downward trends in production and leverage the training department to upskill employees in a group setting, thus correcting bad habits and enhancing production.

Trainers can present new ideas, allow participants to brainstorm and share ideas, utilize training software and bring trainees up to speed quickly.

Virtual Classroom Training

Companies with a global workforce may not have the luxury of classroom training if employees are dispersed in various locations. If your company has numerous locations, consider investing in a Learning and Talent Development platform to function as a virtual classroom solution.

Investing in virtual classroom programs allows you to upskill employees regardless of their location. Employees simply log in to the platform at the designated time and the facilitator can cover an abundance of upskilling training topics.

Microlearning

Another effective way of upskilling employees is to create web-based micro-learning units, short web-based training modules that cover a topic in 5-10 minutes.

For example, an organization may notice a decrease in customer satisfaction surveys. The training team could be leveraged to create a soft skills micro-learning program that covers how to positively interact with customers. Employees could enhance their skills during short workday breaks by taking the micro-learning units that interest them.

Mentors / Subject Matter Experts

Utilize some of your best employees in a mentorship or SME program. Offer your top producers an opportunity to develop their own leadership skills by mentoring others or acting as SMEs in training. Experts are extremely useful in all kinds of training programs, as they can answer questions and explain difficult processes from a practical perspective.

You can also utilize SMEs to assist with building E-Learning content for full micro-learning programs. Your training team will have a peace of mind, knowing that their content is up-to-date and accurate, if they collaborate with SMEs during the development process.

Conclusion

Upskilling has an abundance of advantages, from improving employee motivation to saving the company money. And it doesn’t have to cost a fortune. Begin by assessing gaps in your current employees’ knowledge.

So to finally answer the question – How upskilling your team benefits your organization?

It empowers your employees to develop their own career development path and ultimately offer their skills and expertise to help the company achieve its goals. Take the time to invest in upskilling employees so that they stay with you and help your organization to grow and thrive.