Benefits and Compensation

Dramatic Improvement in Turnover

And going one step further—if we can do a good job of managing turnover among top producers, we’ll improve other key metrics like retention of customers, says Ahlrich, who is owner of ExpertSpeaks, and a consultant and business developer for Gregory & Appel. He offered his tips at a recent webinar sponsored by BLR and HRHero.

What Doing It Right Looks Like

The chart below illustrates how improving turnover helps. This was a grocery store project, with a company that did a lot of transactional hiring of baggers and clerks, jobs with historically huge turns.

The company found that 22% of the people it hired were terminated within 14 days. When the employer focused on doing a better job of hiring and managing, the results were dramatic. ( in the chart, “W 1-2” means “Weeks 1 and 2.”)


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Hiring to Corporate Values

A metal stamping plant was also having significant turnover issues. The employer changed its approach and started hiring to basic corporate values instead of measuring lifting and “won’t steal” scores.

In calculating the return, the company dug deep, including costs like scrap rates (failures), terminations, absenteeism, and medical costs. They found they were hiring a higher caliber of worker which resulted in lower scrap rates and fewer workplace injuries. Turnover improved, and firings dropped dramatically, as did absenteeism.

The cost of instituting the new program was $18,500. Savings were estimated as a whopping $785,000!

The bottom line, says Ahlrich, is that you can guarantee your CFO double his or her money back, and, as this metal stamping company did, you may do much better.

Metal Stamping Plant Turnover Program Results

Forward-Looking Metrics

We need forward looking metrics, says Ahlrich. For example :

Old—Rearward-Looking Metrics

New—Forward-Looking Metrics


•Outcome of activity 

•Time to fill 

•Time to high productivity 

•Turnover rate 

•Turnover quality 

•Training cost 

•Training payback 

This approach may be unsettling, says Ahlrich, because now you are accountable for meaningful results, not just activity. Maybe you should consider mapping 30% of managers’ pay raises on developing and retaining top performers.

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Are We Measuring the Wrong Thing?

We measure and time the steps in the process …

  • Number of Openings
  • Days the Position is Open
  • Number of Candidates
  • Number Interviewed
  • Offer Hit Rate
  • Cost per Hire
  • Turnover
  • Time in Position
  • Time from Interview to Hire

… but we typically don’t do a very good job of measuring quality:

  • Quality of Referral Source
  • Quality of Candidate
  • Quality of the Job Fit
  • Quality of the process as a predictor of performance
  • Level of proficiency of the candidate in specific skills
  • Quality of the handoff to the hiring manager
  • Quality of the overall team

Be wary of manipulating inputs and not outcomes, says Ahlrich.

In tomorrow’s Advisor, Are we measuring the same thing? (Management Mashup) plus an introduction to the trusted, go-to resource for compensation pros— Employee Compensation in [Your State].