How to Retain and Motivate StaffTom Vovers December 2013

Who is this guy?

1989

19911993

2013

2003

2001

2002

2007

“HR Veteran working across industry in

Viet Nam”

AustraliaViet NamThailandSingaporeCambodiaMyanmarPakistanIndia

1996

What do you know about HR2B?

HR2B "Human Resources to Business" is a professional services company focusing on HR in Viet Nam.

HR2B has deep practical experience of the Viet Nam market that enables us to create Search results that last.

Agenda

Measurement

Costs

5 Actions

Measurement

What gets Measured gets Managed

1. Retention rate2. Turnover rate3. Voluntary turnover rate4. Average LOS of current employees5. Average LOS of Leavers6. Special characteristics Leavers7. Vacancy rate.

Retention Rate

Number of stayers

Divided by

Number of personnel at beginning of

period

Times 100 Equals Your retention rate

( 90 ÷ 100 ) X 100 = 90%

Calculating your retention rate (stayers)The number of “stayers” (employees who remain at the end of calculation period) divided by the number of employees you had at the beginning of your calculation period times 100 equals your retention rate. Example of Retention Rate CalculationIf you have 100 employees starting the first day of the month, and 90 employees at the end of the month, you have lost 10 of employees. Your retention rate is 90 percent.

Turnover Rate

Number of leavers

Divided by

Number of people

employed

Times 100 Equals Your turnover rate

( 50 ÷ 175 ) X 100 = 28.6%

Calculating your turnover rate (leavers)The number of “leavers” (employees terminating during your calculation period) divided by the total number of people employed during your calculation period times 100 equals your turnover rate.

Example of Turnover Rate CalculationYou had 175 people in your employment in January. Fifty employees left by the end of the month. A simple turnover rate is 50 divided by 175, which equals 28.6 percent.

Voluntary Turnover

Number of voluntary leavers

Divided by Number of people

employed

Times 100 Equals Your voluntary turnover rate

( 12 ÷ 175 ) X 100 = 6.9%

Calculating your voluntary turnover rateThe number of employees who left voluntarily divided by the number of employees you had during your calculation period times 100 equals the voluntary turnover rate.

Example of Voluntary Turnover Rate CalculationFifty total employees left, but only 12 were dissatisfied with the organizational policy, compensation, and/or career opportunities. Good exit interview strategies should help you determine which employees terminated voluntarily.

Involuntary - Of the other 38, 15 left when you cut a department, 7 women followed their husbands to another part of VietNam, 11 were terminated for poor performance, and 5 became ill and could no longer work. These numbers indicate involuntary turnover.

Average Length of Service

Total months “stayed”

Divided by Number of current employees

Equals Average tenure of “stayers”

122 ÷ 10 = 12.2 months

Calculating the average tenure of your employeesTo compute the average tenure of workers, list each worker and the number of months the worker has been at the organization. In this example, the time period is calculated in months. Your tenure rate can be calculated by months, years, or other time periods.

The sum of months worked by all current employees divided by the number of employees you have today equals the tenure of “stayers”.

Average LOS - Leavers

Total months worked

Divided by Number of “leavers” Equals Average tenure of “leavers”

123 ÷ 13 = 9.46 months

A calculation on longevity (total number of months worked before quitting) may highlight the point at which employees “fall off”, allowing you to rethink your organizational response. It may be useful for you to identify the average tenure of employees who left within the previous 12 months, or within any time frame that accurately represents the trend you are researching.

Calculating the average tenure of your leaversThe sum of months worked by “leavers” who worked in the last 12 months and resigned before today divided by the total number of “leavers” who worked in the last 12 months and resigned before today equals the average tenure of employees who have left over the previous 12 months.

‘Special’ Characteristics Rate

Number of leavers

supervised by Phuc

Divided by

Total number of leavers

Times 100 Equals Your turnover rate for Phuc

( 3 ÷ 12 ) X 100 = 25%

Calculating special characteristics of “leavers”The number of “leavers” that display the identified characteristic divided by the total number “leavers” during the calculation period times 100 equals the voluntary turnover rate for that special characteristic. Example of Special Characteristics CalculationsFor this example, we will look at the number of employees supervised by Mary Jones who leave voluntarily. Of the 12 employees who voluntarily left the organization, 3 were supervised by Nguyen Thanh Phuc..

Vacancy Rate

Number of vacant

positions

Divided by Total number of positions

Multiplied by 100

Equals Your vacancy rate

( 7 ÷ 25 ) X 100 = 28%

For some positions, you may wish to determine a vacancy rate to see if there is a trend in a job position. Or, you may wish to determine your overall vacancy rate to see if there is a trend in your organization. Calculating your vacancy rateThe number of vacant job-specific positions (or positions within the whole organization), divided by the total number of job-specific positions (or within the whole organization), multiplied by 100 equals your vacancy rate.

Using Measurement

Tracking - Start todayReporting - Agree with your bossManaging - Add to Managers lifeSharing - Community

Cost

Turnover - so what?

Measuring Cost

Direct Costs● Relatively easy to

measure with lower error of measurement

● Focus on process / transactional improvements

● Easy to use to get what you want from management.

Opportunity Costs● Requires estimates,

scenario planning● Focus on long‐term and

strategic management issues

● Harder to use, but don’t ignore

Calculating Cost of Turnover

1. Costs to off‐board employee.

2. Cost‐per‐hire for replacement.

3. Transition costs, including opportunity costs.

4. Costs from long‐term disruption of talent pipeline.

Short Cut Turnover Cost

Turnover costs are often estimated to be ● 100% ● 300% ● of the annual base salary● of replaced employee (150% commonly used)

ActionHow to Retain and Motivate Staff

What can you do about Turnover?

Desirable Redundancy.End of Contract

UnDesirable“Natural” Turnover

Voluntary TurnoverVoluntary Turnover

Expected Unexpected

5 Ways to Retain and Motivate

1. Employee Value Proposition2. Onboarding3. Performance Management4. Employee Engagement5. Career Paths for Top Talent

1) EVP - Firing Starts with Hiring

For employees, the EVP – Employee Value Proposition – explains why candidates choose to work for you rather than other potential employers.

1. Attract some, repel others.2. Focus recruitment efforts.3. Improve Selection.4. Speed up integration of new person.

2) Onboarding

An effective onboarding process:1. Analyzes and efficiently addresses skill gaps required to

meet performance standard2. Provides organizational positioning skills3. Aligns with organizational values and culture

Effective onboarding enables faster cultural integration and achievement of performance standards. It can significantly reduce transition costs

3) Performance Management

Aligns performance with strategic direction of the company1. Optimizes performance contribution of

employees2. Shapes organizational culture3. Fully engages employees

It all comes down to conversations. Every decision made about performance management should be framed by asking, “Will this help or hinder meaningful conversations.”

4) Employee Engagement

Drivers1. Strategic Alignment2. Trust in Senior Leadership3. Immediate Manager Working Relationship4. Peer Culture5. Personal Influence6. Career Support 7. Developmental Opportunities8. Employee Recognition9. Pay Fairness

5) Different Career Paths

High PotentialsTop Talent on generalist career trackRequire a high degree of learning agility

High ProfessionalsTop Talent on a specialist career trackHave specialized expertise developed over years of focused development

Emerging TalentEarly career talent with all characteristics of Top Talent but limited developmental experiences and possibly undetermined career path

Thanks for Coming

Good luck inRetaining and Motivating your Staff !