Employee Turnover: Do You Have a Strategic Transition Plan

By Matt Krumrie and Jim Lynch

9/2006 

We all know that employee turnover is costly to the company.  When employees leave, they take knowledge, experience, and contacts with them.  And, it takes time to get new employees trained and up to speed.

Let’s assume you’ve done everything possible to retain your valued employees.  The compensation you offer is competitive.  You have a great benefits package and it’s designed to encourage employees to stay with your company (for example, by providing more leave and higher vesting the longer they’re with you).  And your management practices allow your employees to enjoy and thrive at their job.

Employee turnover is still inevitable. Employees will move on to opportunities that better fit their career or personal goals. Some will leave satisfied with their experience, others will leave in haste, and ready to get on with something new. Some will retire or begin working part-time. And some will die.  Planning for employee turnover, therefore, is critical to the continued success of all businesses.

“Planning for turnover is crucial because it affects the company’s bottom line,” says Diane Domeyer, executive director of OfficeTeam (www.officeteam.com), the world's largest specialized temporary staffing service for administrative professionals. Replacing valuable employees requires a large investment of both time and resources.

“The departure of valuable, tenured employees can lead to the loss of company knowledge and important industry contacts,” says Domeyer. “These resources have an impact on the organization’s success and the service levels provided externally as well as internally.”

As a significant number of baby boomers get ready to leave the workplace, it is also important that companies do some forecasting to understand the impact on their workforce and put in place a strategic plan to manage it.

Redundancy of Responsibilities

“Ideally, managers are aware of the primary work activities of everyone on their team, and peers are cross trained to be able to take over for each other when necessary,” says Peggy Andrews, principal of Mendota Heights, Minnesota-based Andrews Consulting, which provides HR leadership to companies on a project basis.

Managers cannot distance themselves from the tasks performed by their employees.  Rather, they need to be involved and participate.  They should know what’s getting done and how it’s getting done.  One method for doing this:  MBWA (management by walking around).  Don’t stay tucked away in your office.  Get in the trenches and stay on top of what’s happening. 

Managers should also consider rotating duties from one employee to another from time to time.  This has the added value of others identifying possible improvements in the way tasks are performed.

Documentation

Proper and complete documentation of positions and jobs may be the most important part of a transition plan. 

·        Job Descriptions
Make sure you have a job description for each position.  Job descriptions should list primary responsibilities, to whom the employee reports, what workers report to this position, and education and experience requirements.

·        Organization Chart
Each section and division should have an organization chart which clearly shows the chain of command.  They should also include any temporary or contract workers.

·        Task-Based Documentation
For positions that have recurring tasks, document each task listing specific steps to complete the task including paper and electronic processes, list other employees who are responsible for various parts of the task, and create a flow chart for the task.

·        Automated Computer Systems Documentation
If automated computer systems are used in the position, document the name of the system, the purpose of the system, by whom the system is used, how they use it, who owns the data (who is the manager in charge of the data), the technical contact, user permissions, and the application and data sources used by the system.

·        Work Products
List all products created by the position.  For example, perhaps the position is responsible for generating monthly invoices to your customers. This is a product that obviously must get produced without fail.

·        Business Contacts
List all business contacts with which the position interacts and the purpose of the relationship.  Include other positions within your organization as well as any outside contacts.

Grooming Employees for Advancement

Advancement is something a lot of us look forward to in our organization.  When we work hard and enjoy successes, we anticipate one day being promoted.  And there are few things more disappointing than being passed over for a promotion, especially by someone brought in from the outside, and especially when your employer could have done more to prepare you for the promotion. 

If you have good employees, why not prepare them and promote from within your organization?  Preparation is necessary because advancement is not solely based on performance.  Positions with more responsibility require additional education and specialized training. 

General Electric’s employee advancement program is well known.  Because they properly prepare and groom their employee for advancement, they can first look inside the organization when positions become vacant.  G.E. and other organizations do this by providing a management training program, teaching their employees technical and soft skills they would look for if seeking outside candidates.  This creates tremendous loyalty from their employees and ensures seamless operations and revenue as employees transition and retire.  Small and medium companies can benefit from these same practices.

Exit Checklist

“Every company should have an exit checklist for both planned and unplanned turnover situations,” says Andrews. The checklist should include duty and relationship transfer and data management activities. If you don’t already have an understanding or documentation about how to perform their duties, the automated computer systems they use, and the people with whom they work, this is your last opportunity to get it done. 

Because it may take weeks or even months to hire their replacement, it will be necessary to reassign their duties to another worker or several other workers in the interim. Make sure someone is assigned responsibility for each task performed by the departing employee. And, make sure each of those workers gets an opportunity to learn those duties, preferably from the departing employee. 

Also, don’t rely on the departing employee to be available after their departure.  It is likely they will become completely preoccupied by their new endeavor and have little time to spend keeping you afloat, even if you offer compensation.  This applies even when the departing employee is transferring to another position in your company.  Even though they may be located nearby, they will be busy learning their new job, and meeting expectations of their new boss.  So, while they may be available to answer quick questions, they probably won’t be available to do much more than that.

Adopt Flexible and Innovative Polices for Retiring Workers

With many baby boomers nearing retirement, it’s important to understand the benefits these workers can continue to bring to your organization. Not only do older workers bring experience, they bring knowledge, passion and a good work ethic.

OfficeTeam’s survey of executives from the nation’s 1,000 largest companies shows that 78 percent of these firms are taking steps to compensate for the loss of baby-boom-age employees. They are doing this by:

•  Inviting retirees and those nearing retirement to serve in consulting, mentoring and training roles.
   

• Keeping these valued staff members in the organization allows other employees to learn from them, ensures that industry contacts and knowledge remain with the company, and eases potentially difficult transition periods. It also motivates staff nearing retirement to continue their strong performance because they know their efforts will be rewarded.
   

• Another way employers can help their less-experienced personnel learn from their tenured colleagues is providing mentoring opportunities, in which more-experienced employees can share their insights on career growth, enhancing skill sets, the profession and the company.

Also consider part time and flexible schedules for retirees, perhaps working 10 to 20 hours a week or only several months out of the year, maybe during your busy time.  You can offer retired part-timers a handsome hourly wage because you will save on other expenses such as health care (which they may not need if it is provided through their retirement plan). 

Part time works well for retirees by supplementing their retirement income and sustaining their sense of contribution and accomplishment, while still leaving them with plenty of time to enjoy leisure activities.  And it can work well for you by providing much needed expertise and experience.

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