Using Analytics to Improve Retention Presented by: Shane Douthitt, Ph.D.
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Learning Objectives The impact of turnover • How big of a problem is turnover for organizations? How to assess and analyze the drivers of turnover • Understand how to use your employee survey diagnose turnover at your organization Diagnosing new hire turnover at YOUR organization • A framework for building effective entrance and onboarding surveys Reducing new hire turnover • Case study examples of how to reduce new hire turnover
Work Group Speakers Shane Douthitt, PhD Scott Mondore, PhD Hannah Spell, PhD Matt Betts, PhD Managing Partner Managing Partner Director of Research and Analytics Consultant
Presenter To stay up-to-date on all our research and presentations, • Join our LinkedIn page: https://www.linkedin.com/company/strategic-management-decisions • Follow us on Twitter: @SMDHR Shane Douthitt, Ph.D. Managing Partner sdouthitt@SMDhr.com smdhr.com/leadershipteam.html
SMD Link – Rethink Assessment With a foundation in science, all of our tools and solutions work together through SMD Link and connect to your key business outcomes – whatever they may be .
What Our Clients Typically See Customer Safety Voluntary Turnover average reduction Satisfaction improvement in of 11% average actual injuries of improvement of 17% 5-15 percentiles
Examples Business Outcomes Customer Satisfaction Financial • • Customer/patient Satisfaction Profitability (see this especially in consulting industry) • • Customer Loyalty % to budget goal • Revenue • Safety/Compliance Cost of Delivery • Falls/Safety Incidents • Compliance scores/certifications Productivity • Production (e.g., widgets produced) • Quality Time to Proficiency with new hires • • On time delivery Absenteeism • Quality (e.g., % defects) • Quality of Care (healthcare) New Product Development (see this a lot in Pharma R&D) • • Automation/Transformation New Products Developed • Pipeline Progression • Sales Milestone Completion • New Business Revenue • Quota attainment Turnover • • Market Share Turnover • • Contract Profitability (service industry) First year turnover • Regretted Loss turnover
UNDERSTANDING TURNOVER CASE STUDY THE DATA BALANCING ACT MEASURING ENTRANCE & ONBOARDING CASE STUDY INSIGHTS FOR YOUR ORGANIZATION
Why We Care About Turnover • U.S. Voluntary turnover rate is 23.4% annually 7 • Turnover is getting more difficult to manage, 62% of HR Professionals reported having difficulty hiring workers with essential skills for their workforce 5 • Turnover is an easily tracked metric, and one that HR can demonstrate direct ROI by reducing • On average, about 1/3 of turnover occurs in the first 6 months of employment
The Cost of Turnover • Direct replacement costs typically 50-60% of an employee’s annual salary, with total turnover costs ranging from 90-200% of the employees annual salary 1 • Must also consider costs for: – Administrative time taken for separation processing – Developing and placing advertisements – Interviewing, reference checking, drug testing, orientation, and on-the-job training for a new employee 2 • Particularly for New Hires, turnover is even more costly because they haven’t worked long enough to provide value to the organization that would offset their hiring costs
Downstream Effects in Healthcare: Turnover & HCAHPS/Patient Sat. • Analyzed actual turnover data from 2014-present and Turnover ‘risk’ data from Employee Surveys and 2014-present HCAHPS/Pat. Sat. data from 200 acute-care facilities Turnover & T.O. Risk HCAHPS/ Pat. Sat. 3-4% Impact • Past turnover and current turnover risk is having a 3-4% impact on HCAHPS & Pat. Sat.
Downstream Effects in Healthcare: HCAHPS/Patient Sat. and Patient Outcomes Mortality Rates (-.10) HCAHPS/ Pat. Sat. Decreases Readmission Rates (-.30) • Patients’ overall experience, as measured with the Overall HCAHPS Ratings, is a key driver of patient Mortality and Readmission rates. • The negative relationships in the model indicate that higher Overall HCAHPS Ratings result in lower Mortality and Readmission rates. – For every one unit increase in the Overall HCAHPS score, average Mortality Rates decrease by .10 and average Readmission Rates decrease by .30. * Results are based on CMS data from 1879 healthcare organizations across the United States. ** Higher values indicate a stronger impact based on a 0.0 to |1.0| scale.
Is Turnover Risk a Good Proxy for Actual Turnover? TR = Turnover Risk Term = Actual Turnover Org. A Org. B Org. C Org. D Org. E Survey Dimension TR Term TR Term TR Term TR Term TR Term • Numbers indicate statistically significant drivers of either Turnover Risk or Actual Turnover. Career Development 3 4 3 Green when the same, red when different. Communication 1 • Turnover Risk measured by two items – • “I would like to be working at this Comp/Benefits 2 1 organization three years from now.” • “ I would feel comfortable referring Customer Focus 3 3 family and friends to this organization Job Fit 1 1 2 2 2 3 for employment.” • Turnover Risk is consistently the strongest Management 4 1 3 4 1 predictor of actual turnover, but the drivers are often times different when examining Turnover Mission 2 2 Risk versus Actual Turnover as outcomes. Quality 3 • Analyzed drivers across 5 organizations, representing more than 150,000 employees. Safety 3 • Commonly measured categories that were not found as drivers of Turnover Risk or Actual Senior Leaders 2 4 1 1 1 3 2 Turnover were: Accountability, Staffing, Tools & Teamwork 2 4 2 Resources, and Wellness. Work-life Balance 3 1
UNDERSTANDING TURNOVER CASE STUDY THE DATA BALANCING ACT MEASURING ENTRANCE & ONBOARDING CASE STUDY INSIGHTS FOR YOUR ORGANIZATION
Voluntary Turnover Rates Turnover Rate by Month 18 16.8 16.2 15.8 16 15.2 14.6 14 12.4 12.2 12 9.6 9.4 10 9.3 9.3 9.2 9.1 9.1 8.8 8.1 8.4 8.4 7.9 7.9 7.8 8 6 January February March April May June July Organization Overall Customer Care Reps Customer Care Managers
Turnover Analysis Methodology Goal: Identify the drivers of turnover by analyzing the experiences of employees that voluntarily left the organization. • 1022 Employees (across the entire organization) who took the 2017 employee survey have voluntarily left the company • Key drivers of voluntary turnover identified using Logistic Regression Analysis • Item-level drivers of voluntary turnover were examined • The turnover driver analysis was conducted on two groups: – Organization overall – Customer Care Reps
Mean Differences Between Still Employed and Turned Over Employees Category Still Employed Vol. Turned Difference Supervisor 4.54 4.05 -0.49 Career Development 4.38 4.04 -0.34 Job Fit 4.22 3.79 -0.44 4.29 3.91 -0.38 Senior Management Tools & Resources 4.32 3.95 -0.36 Management 4.25 3.92 -0.32 Fairness 4.23 3.92 -0.31 Staffing 3.82 3.53 -0.29 4.69 4.41 -0.28 Engagement Customer Focus 4.50 4.26 -0.24 Work Life Balance 4.45 4.20 -0.24 Teamwork 4.31 4.08 -0.23 Communication 4.20 4.00 -0.21 Categories in bold italics have been identified as key drivers.
Analyzing Your Report: Key Drivers of Turnover What is a HeatMap? • A graphical plot that shows the impact of employees’ attitudes on a key business outcome. • Allows leaders to identify attitudes that are key drivers of business results and prioritize improvement efforts in these areas. HeatMap Interpretation Maintain Promote (Average Rating) Performance 1. Focus: Low Performing | Key Driver 2. Monitor: Low Performing | Not Key Driver Monitor Focus 3. Promote: High Performing | Key Driver 4. Maintain: High Performing | Not Key Driver Level of Impact
Organization Overall: Key Drivers of Turnover Maintain Promote 4.9 4.7 Performance (Average Score) Customer Focus Supervisor 4.5 Work Life Balance Career Development Teamwork 4.3 Tools/Resources Senior Mgmt Fairness Management Communication 4.1 Job Fit 3.9 Staffing 3.7 Monitor Focus 3.5 Level of Impact on Turnover
Potential Impact on Turnover A .15 increase in mean score can result in the potential reduction in turnover shown below: Job Fit- 4.3% Supervisor- 6.5% Career Development- 5.4% TOTALS Nearly $5 million dollars Total potential Potential reduction of 166 in cost savings reduction = 16.2% of 1,022 voluntary turns
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