Scott MacStravic, PhD
Employee turnover is known to cost employers, including healthcare organizations, huge sums in replacement costs, to say nothing of creating difficulties with current staff, due to involuntary overtime, overwork, quality problems, and similar effects of not having a full complement of employees available. But one of the more serious problems it creates is its weakening of the potential for return on investments in employee health and competency development.
While it is gradually becoming recognized that healthier employees can be significantly more valuable to their employers, and that staff development in terms of education, training, mentoring, etc. has the same effects, both these forms of development depend on retaining employees long enough for the investments to pay off. If employees stay with the same employers for only a year or two, there is little reason to improve either their health or competencies.
And experts persist in predicting that employees will have dozens of different employers in their lifetimes, rather than sticking long with any one. If people truly work for even two dozen employers in even a fifty-year employment lifetime, this means that their average tenure at each one will be only two years. A recent report indicates that the US Department of Labor estimates that someone entering the job market today will have had 10-14 jobs – by the time they are 38! [K. Fisch & S. McCleod “Did You Know?” Real Player (didyouknow.wmv) Mar 4, 2007]
It also indicates that one-quarter of all workers have been with their current employer for less than one year, while half have been with theirs for less than five years. On the other hand, the latest Bureau of Labor Statistics report indicates that the average voluntary turnover rates vary widely by industry, with low-skilled, low-paid workers averaging over 50% turnover per year, while high-skilled, high-paid workers tend more toward 10-20%. [“Latest BLS Turnover Rates for Year Ending Aug 2006” Nobscot Corp. Oct 11. 2006 (www.nobscot.com)
My own career, thankfully over now that I am retired, included working for roughly twenty different employers, and being laid off or fired an even dozen times. On the other hand, the older I got and the more highly paid, the longer I stayed. I averaged only months and never more than two years at any of my first dozen or so jobs, but slowed down mightily in my last four, with tenure of four, five, six and eight years.
Before employers tremble at their risks of losing employees in whom they invest significant sums in competency or health development, they should first determine whether they intend to pursue significant financial returns and performance improvements thereby, or belong in the replaceable-cog category, and need only minimize costs. If they pursue returns, the first thing they must do is to devise or hire methods to evaluate the full range of payoffs available in both kinds of investments, which range over pretty near the entire gamut of performance criteria that any balanced scorecard contains.
Next, they should identify precisely which employees they intend to invest in, those with true potential for better than average, even delightful levels of ROW (Return on Workforce). Unless they see at least the potential for achieving significant ROI on their investments, they need not include everybody, but should certainly include those who promise to both improve enough and remain long enough to deliver such an ROI.
When it comes to competency development, investments tend to be greatest among younger workers, since they have more to learn in most cases, though many with high-tech backgrounds and jobs may be already ahead of their older peers. When it comes to health development, the more expensive types of investments tend to be needed with older workers, where risk conditions and chronic conditions are more common, while younger workers may need less investment in risk behavior prevention/reform and basic health promotion and traditional prevention.
The key to successful competency and health development is to be selective with respect to who and how many to invest in, as well as how much to invest in each. And fortunately, investing in employee competency and health development are among the most effective ways to promote longer employee tenure, so that the investments, themselves, can help make the likelihood of positive ROI greater. Investing in employees, whether health, competency, or both, represents one of the surest and most impressive ways to demonstrate that the organization values them, which has long been one of the major discriminators between those who leave their employer and those who remain loyal.
Remember Me
