Employee Turnover and Maximizing Staff Retention
Dr Glenn Carter
Healthcare Professionals Group

Presentation Outline
Reasons for staff turnover
Costs to the business of this turnover
Maximizing staff retention in order to enhance business profitability.

Analysing the Reasons for Staff Turnover
Staff turnover – disruptive, expensive and affects team morale.
A study of 12,0001 employees found that people will leave one company and go to another for the
following reasons:
 exciting work and challenges
 career growth, learning and development
 working with great people
 fair pay
 supportive management/good boss
 being recognized, valued and respected
 benefits
 meaningful work and making a difference
 pride in the organization, its mission and its products
 great work environment and culture
1. Love ‘Em or Lose ‘Em, Getting Good People to Stay, Kaye B, and Jordan-Evans S, Berrett-Koehler Publishers 2002, p.10

Analysing the Reasons for Staff Turnover
 autonomy, creativity and sense of control
 flexibility: work hours
 location
 job security and stability
 diverse, changing work assignments
 fun on the job
 being part of a team
 responsibility
 loyalty, commitment to the organization or coworkers
 inspiring leadership
Even if employees are paid well above the market rate they will still leave if they are not enhancing
their skill set or if they don’t have the social bonds to keep them in the workplace.

Analysing the Reasons for Staff Turnover –
The Exit Interview
The Exit interview is the best way of ascertaining the reasons why employees are leaving the
company
A structured series of probing questions that are specific to both the job and the individual.
Rather than a quick ‘thanks for working with us and all the best in the new job chat.
A properly managed exit interview will elicit useful information that can then be used to assess the
workplace and make improvements to prevent additional resignations.

Analysing the Reasons for Staff Turnover –
The Exit Interview
Exit interview questions include the following:
 Is the job that you were doing what you expected following the information we gave you during the interview?
 What additional information should we be giving new employees regarding the scope of the job that they are
being interviewed for?
 What were the best aspects of the job?
 What aspects would you like to see improved?
 Were you supported with a good induction and initial training?
 What advice would you be giving to the next person in your role?
 What types of candidates do you think are best suited to our culture?
 If we were to rethink this role what other suggestions could you make?

Costs of Employee Turnover
A study found that the turnover cost for every employee who leaves ranges from 90% to 200%2 of
their annual salary. Highly skilled professionals can cost up to 5 times their salary.
In assessing the cost of replacing an employee consideration needs to be given to:
 The business lost when the role is vacant
 The disruption to an existing smooth-functioning team when existing employees are required to take up the
departed employees workload
 Work put on hold until a replacement is found
 Lost customers and business opportunities because relationships have been severed
 Loss of shared knowledge

Costs of Employee Turnover
 Lost supplier relationships
 The gains made by competitors by employing your employees
 Lowered morale and productivity of existing employees
 The costs involved in hiring – advertising, agency fees, management time involved in interviewing and
selection testing
 The direct employment costs of the new hire – salaries, sign-on bonuses, moving allowances, superannuation,
workers compensation, payroll tax, office furniture, IT equipment.
 The time it takes to train a new person
 The socialization of the new person into the group

Costs of Employee Turnover
It is a useful exercise to calculate these costs for your particular business. You will be aware of the
significance of the role that is vacant, the business that you are losing and the disruption that the
vacancy is causing. These costs can be considerable and can be many millions of dollars when
significant accounts go to competitors.
Consider how much money your organization would save by reducing turnover and how more
effectively your organization could use the dollars associated with recruiting and training new
employees eg employee development and enrichment programmes.

Costs of Employee Turnover
There are many implications when someone leaves an organization, but consider the following
scenarios:
When a Sales Representative leaves territories are vacant and the doctors are receiving the
competitor’s messages, therefore losing market share.
When a Product Manager leaves supplier relationships are lost, the new Product Manager doesn’t
have the personal chemistry to work effectively with the advertising people; is unfamiliar with the
marketing mix and overall brand strategy so therefore competitive opportunities are lost.
When a Senior Manager leaves there is a loss of high level networks with key decision makers
therefore business takes longer and can be more costly (the best deals cannot be negotiated
because the personal relationships are not there)

Costs of Employee Turnover
When a Clinical Research Associate leaves, clinical trial project management milestones are not
met, local investigators lose confidence, regulatory timelines are lengthened, local health economics
data is not being collected and the entire pre-marketing strategy is affected.
When Regulatory or Health Economics staff leave relationships with both the government and head
office are lost, resulting in delayed submissions.
When the Receptionist leaves the phone doesn’t get answered resulting in lost business; or an
inexperienced receptionist cannot identify key callers or visitors resulting in a decrease in customer
service and lost business.

Maximizing Staff Retention
Maximizing staff retention saves the company money.
There are a range of initiatives to minimize turnover and it starts with the interview process.
Candidates become attracted to the vacancy because they have seen the advertising and have
heard positive reports about the company in the marketplace.
Creating and nurturing these positive thoughts within the candidate marketplace, and thus
increasing the pool of candidates available for interview, are central to a company’s Recruitment
Brand Management strategy.

Maximizing Staff Retention –
the Recruitment Brand Campaign
When devising a Recruitment Brand campaign the following questions should be asked:
 What impressions do the candidates have of our company?
 What types of people suit our organizational culture?
 What is the personality of our department?
 What are the key benefits of working for the company?
 How will these benefits be communicated?
Answers to these questions then drive the advertising strategy from the text of the ad through to the
entire feel of the campaign in order to communicate the right messages to the right audiences.
Very few companies invest in recruitment brand campaigns to differentiate their offerings to
the candidate marketplace. Those that do have a larger candidate pool from which to
choose.

Maximizing Staff Retention –
the Interview Process
The initial interview is an important aspect of the candidate’s introduction to the company, however
many managers treat this interview too casually.
Behaviourally based interviewing is the strongest technique to assess a candidate’s suitability for a
particular role. The premise here is that past behaviour and performance is the best predictor of
future performance.
This can be achieved by asking candidates:
Prepared questions
Probing for fuller answers
Understanding what the candidate is capable of doing
Understanding what the candidate wants to do.

Maximizing Staff Retention –
the Interview Process
During the structured interview interviewers want to find out:
 How the candidates have handled various situations
 What they did
 The results of those actions
in order to uncover the true nature of the candidate’s knowledge, motivation and values
With this insight an assessment can be made in terms of the candidate’s organizational fit. If the
candidate is the wrong person to add to your existing group they won’t form the necessary informal
networks to share knowledge and enhance group productivity and turnover will be an issue.

Maximizing Staff Retention –
the Interview Process
To augment the interview process a number of employment tests can be used including:
 IT and Office skills
 Role plays
 Writing tests
 Presentations
 Analysis of clinical papers
 Psychological tests
 Sales aptitude tests
 Management and leadership assessments.
These tests can be invaluable in reducing turnover because the employer can gain an accurate
understanding of the candidate’s skill set so there is no misunderstanding once they have joined the
company.

Maximizing Staff Retention –
the Interview Process
To decrease turnover it is necessary to ensure that the candidates have a good experience
throughout the entire interview process. How they see the company in the future will depend on how
they remember their first experiences.
With successful candidates it is advised to:
 Move them quickly through the interview process (good candidates have high expectations of quality and service and don’t
favourably view delays)
 To take time to clarify expectations so there is no misunderstanding of what the role involves
 To excite the candidates but not to oversell the job
 To stay close to the candidates throughout the process continuing to probe for attitude, motivation and organizational fit.

Maximizing Staff Retention – Induction and Socialisation
Once employed, new recruits should have a good induction and socialization experience.
This involves:
 Meeting with other employees
 Understanding the structure of the company, what the different employees are responsible for, and how they
are expected to interact with employees in other departments
 Who to go to for help
 How to use the office IT and telephone systems
 Training in procedures and processes.

Maximizing Staff Retention – Induction and Socialisation
During this period employees will also learn how to socially adapt to their new workplace. They will
need to understand the social norms of acceptable behaviour and the unwritten rules for interaction.
Without this knowledge they may make social mistakes that will affect their smooth introduction.
Following an effective induction employees then form a psychological contract with the company to
deliver what is required.
The new employees then identify with the new company and build productive relationships with their
management, peer group and subordinates.

Maximizing Staff Retention – throughout the
employment relationship
After the new employee has joined there are a range of initiatives that a manager can do to retain
their staff including:
 Ensuring that their jobs are interesting
 Their career goals are supported
 Information is shared with them
 They are connected with others in the organization
 That they are respected and valued

Maximizing Staff Retention – throughout the
employment relationship
Make their jobs interesting
Employees need opportunities for personal challenge and growth. If good workers find out that they are no longer
receiving these necessities then they may decide that they have outgrown the company and consider leaving. The
simplest way to enrich jobs for individuals is to ask them questions such as:
What skills do you have that you are currently not using?
In what areas would you like increased responsibility?
In what ways would you like your job changed?
Managers therefore need to focus on job enrichment for their employees if they wish to retain their services.
A major cause of turnover is workplace boredom. Job enrichment is not difficult, but it does require staying alert to
opportunities for all your employees and working with them to enrich their jobs.

Maximizing Staff Retention – throughout the
employment relationship
Support their career goals
Discuss your employee’s futures, openly and frequently. Involve them as you discuss their abilities, choices and
ideas.
Employee’s don’t expect all the answers, but they do want you to listen to them and to offer your perspective.
They will also benefit from specific feedback with examples of their performance and how it relates to their future
goals.
Take time out to have in-depth discussions with them about how the industry is changing over the next 2-5 years
and what skills they will need to compete for roles in the new environment.

Maximizing Staff Retention – throughout the
employment relationship
Share information with them
 Make your employees feel part of the organization by telling them what is happening.
 Information sharing is important at all times but critical during periods of change (downsizing, mergers and
acquisitions).
 If employees are worried about events and don’t have sufficient information they are likely to worry about their
job security and update their resumes.

Maximizing Staff Retention – throughout the
employment relationship
Share information with them
 Managers must give information as early and as honestly as possible and this will make employees feel
important and valued. These employees are likely to have insight into the specific problems and may be able to
offer solutions.
 The role of the manager is also to help employees look into the future, by providing information that helps the
employee’s development and career advancement.
 Employees want to know about the company’s direction and goals, the industry’s future and the emerging
trends that may affect career possibilities. Employees with this information will feel more confident in their
future within the company.

Maximizing Staff Retention – throughout the
employment relationship
Get them connected
 Employees need groups of colleagues who can support them, offer information or help, or just listen to them.
 Connections are a major reason why people stay with a company. Managers need to give attention to
strengthening the bonds between people in their team and others within the organization.
 Employees need to link with others to get their jobs done effectively. Managers need to be asking their staff
“who else in the company do you need to be liaising with to optimize your role?”
 Relationships with others will help employees get their work done and will give them insights to enhance their
productivity. As employees are linked to other functions within the company their knowledge and skills will grow
and they are more likely to stay.

Maximizing Staff Retention – throughout the
employment relationship
Respect them
Even if employees are well paid and have opportunities to learn and grow, if they don’t like their
bosses or co-workers they will leave. It is unacceptable for anyone to exhibit the following
behaviours:
acting in an arrogant or condescending manner
intimidating staff
slamming doors and pounding tables
swearing and behaving rudely
showing disrespect
being sexist, bigoted and using inappropriate humour
humiliating and embarrassing others
deliberately ignoring or isolating some people……. and the list goes on.

Summary
Examined the reasons for staff turnover
Identified the costs to the business of this turnover
Suggestions regarding maximizing staff retention in order to enhance business profitability.

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