reducing employee turnover

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					Human Resources                                                                             ELIZABETH ZIEMBA

Taking The Pulse Of Employees
Employee surveys show that high staff turnover is often a symptom of
management issues such as inconsistent treatment or lack of recognition.

                                           left their jobs because of reasons relat-   visors, we were able to reduce turnover

           and family members have         ing to “bad managers,” citing issues        and improve employee morale by
           become a common means of        such as inconsistent treatment of           focusing on issues that our staff identi-
gauging customer satisfaction in long      employees, lack of communication            fied as management problems,” says
term care, many providers do not sur-      with supervisors, lack of recognition       Kain. “The recommendations that
vey one of their most valuable con-        for employees, limited employee input,      came with the survey results gave me a
stituencies—their employees. Yet           and quality and productivity standards.     list of things to do that were immedi-
employee satisfaction surveys can be a     The study, “Why Healthcare Workers          ate and easy to implement. The results
valuable tool for reducing costly          Quit,” was published January 2003 in        came quickly.”
turnover while improving both staff        JWT Specialized Communications     .
and patient satisfaction.                     Understanding the intricacies of the     Examining The Costs
   Typically, employee surveys are com-    role managers play in retaining             In these days of tight budgets, employ-
prised of three to five pages of paper-    employees is a key goal of an employee      ee surveys may seem like a luxury, with
and-pencil questions designed to elicit    satisfaction survey. “Satisfaction with     the cost of a basic paper-and-pencil
information about the perceptions and      the manager is the single most reliable     survey ranging from $20 to $25 per
experiences of employees concerning        predictor of whether a health care          employee, according to estimates.
issues such as hiring and retention,       employee will quit,” according to the          However, staff turnover is a costly,
relationships within the organization,     health care workers study. “Employees       time-consuming, and troublesome
and general satisfaction with the work-    may be dissatisfied with many aspects       problem for nursing facilities. The
place. Questions can touch on issues       of their jobs yet still remain in them,     direct costs of hiring and training are
such as the quality of relationships       but when they are dissatisfied with         compounded by indirect costs such as
with peers, supervisors, management,       their managers, they are highly likely      low morale and disruption of care, all
and owners as they impact job perfor-      to quit or be terminated,” the authors      of which have a direct impact on the
mance and loyalty; commitment of the       said.                                       financial bottom line. Employee satis -
organization to service excellence;           A case in point occur red at             faction survey results can be used as a
availability of tools and resources to     Fairhaven Nursing Home in Lowell,           tool for retention. According to some
perform job duties; and specific issues    Mass., where the facility was facing an     calculations, saving one employee from
of interest to the particular employer.    unusually high turnover rate for certi-     leaving can more than pay for the cost
   A well-drafted employee survey will     fied nurse assistants (CNAs). An inde-      of the survey itself.
pinpoint problem areas within an orga-     pendent survey revealed that the inter-        In order to understand the costs of
nization as well as clarify its strong     personal skills exhibited by a superviso-   losing employees, providers should
points.                                    ry-level staff member were hurting          first calculate the facility’s annual
                                           employee morale and causing CNAs to         turnover rate, then break that down to
What Some Surveys Are Finding              leave the facility. The intervention that   turnover rates for specific high-priority
Managers may believe an employee           was suggested and implemented was           positions such as registered nurses
survey is not necessary, incorrectly       for Administrator John Kain to provide      (RNs) and CNAs (see box, page 44      ).
attributing turnover to any number of      one-on-one job coaching for the                The second key factor in under-
issues—especially low salaries. But        supervisor to help her develop better
while salary was the deciding factor for   skills for interacting with staff. This     ELIZABETH ZIEMBA is a senior associate at
6 percent of employees in a survey of      strategy helped reduce turnover at the      Stackpole & Associates, Brookline, Mass.,
28,000 health care workers who left        facility.                                   a health care marketing and research
their jobs, approximately 25 percent          “By working closely with our super-      organization.
                                                                                                          Provider • February 2004 43
Human Resources

  standing the financial impact of losing      employee and hiring another ( see box. )         tions for employees for whom English
  staff is the accurate measure of             Once a provider has made those calcu-            is a second language. Surveys can be
  turnover costs. Turnover costs vary          lations, he or she can ascertain whether         traditional paper-and-pencil surveys or
  from facility to facility and are com-       an employee survey would be cost-                conducted in person, by telephone, or
  prised of numerous factors, including        effective. The cost of a survey is based         over the Internet.
  costs of temporary help and advertising      on the number of employees surveyed;                While the price may vary based on a
  fees, all of which must be considered        survey method; length of survey; and             number of specific factors, on average
  to ascertain the true cost of losing one     other factors, including accommoda-              the cost of a basic paper-and-pencil
                                                                                                survey for a facility with 200 employ-
                                                                                                ees (at $20 to $25 per employee) runs
  Calculating Turnover Rates And Costs                                                          approximately $5,000.
                                                                                                   Let’s assume that the cost of
                                                                                                turnover is $7,000 per employee
  COMPUTING TURNOVER RATES                                                                      replaced, as it was in the health care
                                                                                                workers study cited earlier. Manage-
  An annual facilitywide turnover rate is calculated by dividing the total number of            ment is faced with the decision of pay-
  employees who left during the year by the total number of employees on staff                  ing the turnover cost or using that
  and then multiplying that number by 100.                                                      same amount of money to retain
    In other words:                                                                             employees by allocating the replace-
                                                                                                ment cost to study the reasons employ-
  Number of employees who left/terminated during the year
                                                            x 100 = annual turnover rate        ees stay or leave their jobs.
  Average number of full-time employees during the year
    For example:                                                                                Impact On Patient Satisfaction
                                                                                                In addition to direct cost savings due
  80 employees left or were terminated during 2002   = 80 = 0.2857 x 100 = 28.57 percent        to staff retention, improved employee
  280 FTEs were employed during 2002                   280
                                                                                                satisfaction has a direct positive corre-
    The facility has an overall turnover rate of 28.57 percent.                                 lation to patient satisfaction. The qual-
    The same formula can be used to calculate the turnover rate within a job cate-              ity of the relationships among staff,
  gory. For example:                                                                            patients, and family bear a direct rela-
                                                                                                tionship to satisfaction among all par-
 10 RNs left or were terminated during 2002
                                              = 10 = 0.3846 x 100 = 38.46 percent               ties. If an employee is happy at work,
 26 RNs employed full-time during 2002          26
                                                                                                he or she has a better attitude toward
                                                                                                work, and this attitude often translates
  MEASURING TURNOVER COSTS                                                                      into better relationships with patients
                                                                                                and families. Strong positive relation -
  According to researchers Straker and Atchley, turnover factors include:                       ships between staff and patients trans-
    s Costs of employee leaving. These include exit interviewer’s time, employee                late into improved ratings on the cus-
  wages during exit interview, administration-paperwork, separation pay, increased              tomer-satisfaction surveys, said Susan
  unemployment tax, and additional overtime and temporary help. Terminating an                  Eaton in her report, “What a Differ-
  employee may have additional direct costs if mediation or litigation is involved.             ence Management Makes: Nursing
    s Costs of a new hire. These include paperwork-benefit sign-up, advertising                 Staff Turnover Variation Within a
  for position, interviewer’s time, testing costs (drug, skills), medical exams, staff          Single Market.”
  orientation time, background and reference checks, formal and informal training,                 Relationships are disrupted by con -
  and reduced efficiency-productivity of new worker.                                            stant changes in caregivers and are
     s Additional direct-hiring costs. These may include factors such as relocation             negatively reflected in patient satisfac -
  payments, recruiter fees, attorney fees for visa processing for hiring foreign-               tion surveys, she said. s
  trained workers, and other benefits paid to new hires.
     Once an accurate dollar figure has been determined, an informed management                 For More Information
  decision can be made in terms of budget allocation.
     For example, if the cost of turnover is $5,000 per employee who leaves or is                 s The author can be reached at
  terminated and 80 people are replaced each year, the total cost to the facility is   or
  $400,000.                                                                                     (800) 844-9934.

44 Provider • February 2004                                  Reprinted with permission of Provider Magazine.

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