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Employee Turnover: Plan for the Inevitable

Blog Highlights

  • Employee turnover is inevitable
  • Turnover and tenure vary with generational cohort, industry, skill level
  • Valuable institutional knowledge is lost and productivity declines before an employee leaves
  • Important business documents, content, and processes are often known best by the departing employee
  • Strategize and act proactively to maximize business continuity through business analysis, documenting processes and implementing BPM and ECM technologies

Employee turnover is not unique to any one industry. While turnover rates and length of employment (tenure) vary by industry and company, all organizations face challenges in retaining employees and the costs associated with employee departures. The institutional knowledge of the departing employee is vital to the company’s operations but is often not captured to aid in transition. The job processes and content they manage is left to be discovered by other team members in the department and IT.

A tight labor market followed the Great Recession and still persists. The demand for skilled and educated workers in the service-based industry sectors exceeds supply of these same workers. A strong economy fuels job growth, consumer confidence and turnover rates increase as workers chase better opportunities for compensation and career advancement. Reasons for turnover vary, but there are a select few that top the charts: career development, work-life balance, manager behavior and relationship, personal and family well-being, and compensation. All of which obviously don’t occur at your organization.

Employers have found it increasingly difficult to retain employees when other companies are vying to fill vacant seats of their own. There are two types of turnover – voluntary (quits) and involuntary (layoffs). Quits are going up, and layoffs are going down. Here are some statistics shedding light on turnover and tenure:

  • A report by the Work Institute found that 1 in 4 workers quit during 2018 and this is expected to increase to 1 in 3 workers quitting during 2020.
  • Bureau of Labor Statistics data reports the median length of employment declined from 5.5 years in 2014 to 5 years in 2018 for those 25 and older.
  • The millennial job hopper myth is false. Current Population Survey data shows that while younger people are more likely to leave earlier than those older they are not “hopping around” faster than earlier generations.  
  • Length of employment varies by generational cohort, industry, and education level. Older, more educated individuals stay longer. Public employees have an average tenure of 7.4 years while the leisure and hospitality industry has an average stay of 2.2 years.

Turnover doesn’t come cheap. Businesses spend about 20 percent of an employee’s annual salary to replace that worker. Costs result from other employees having to take over responsibilities, retraining a new hire, lost institutional knowledge, and lost productivity among other direct and indirect costs (Center for American Progress). According to the 2012 Allied Workforce Mobility Survey, companies lose on average 23 percent of all new employees within a year. When a new employee is onboarded, it takes on average 8 months of onboarding for an employee to become fully productive.

When an employee leaves, valuable institutional knowledge goes with them. Companies expend resources in developing the capacity of their employees. This knowledge also sometimes gets codified as policy and procedure but typically it resides within the employee, whether manager or analyst. Without any succession plan for knowledge transfer, companies can expect the negative impacts of an employee departure to be accentuated.

Another form of institutional knowledge overlooked are work product and deliverables produced in the form of company records, documents, emails and other forms of unstructured data. Usually, any information needed to be known by a manager and new hire can be found in the departing employees work files. However, this information is often siloed on users’ desktops or in personal filing cabinets and is filed in a manner that only the departing employee would be able locate needed information. After an employee leaves, some action may need to occur — such as a vendor contract termination option, commercial driver’s license renewal, or medical exam review based on HR policy — but may not be known by management or the new employee in that role.

Organizations can be proactive in approaching inevitable employee turnover through a number of business analysis actions including process standardization, process documentation, process management and reporting coupled with the adoption of technologies. Proper business analysis that includes discovery and documentation should occur perpetually even before the employee decides to depart. Indepth interviews with process experts can be conducted individually and in a group session (both have merits and should be employed). If an employee departs, sufficient documentation will exist to speed onboarding of a new employee. Management oversight and reporting ensures that processes are adhered to and monitored ensuring certain metrics are reached and bottlenecks are identified.

Adoption of technology is the primary way of implementing and solidifying standardized business processes. Processes can be converted from being manual, physical and isolated to be more automated, electronic and integrated with the organization. Company records can be stored in an Enterprise Content Management system with an approved filing system that facilitates ease of use by existing employees and transfer of responsibility and knowledge to future employees.

The bottom line is that employee turnover is inevitable, but you can be prepared and minimize the headache that comes with knowledge loss and on boarding new employees. Axyon is well versed in performing business analysis, process review and design, documentation and implementing various business processes as it relates to content management.

Wayne Day | OpenText Content Server Business Consultant, AIIM Taxonomy and Metadata Specialist, AIIM Records Management Specialist, AIIM ECM Specialist

Wayne Day | OpenText Content Server Business Consultant, AIIM Taxonomy and Metadata Specialist, AIIM Records Management Specialist, AIIM ECM Specialist