As the summer winds down, and Fall is imminent, preparing your operation for a solid end-of-year run becomes top of mind. Things like shortened timeframes, and workforce shortfalls can affect the final output for the year.
One topic that has taken center stage at many of our clients is Turnover. In July, there was also a flurry of discussion on the ASA (American Staffing Association) discussion board – the ASA Central Network. The discussion was around how to calculate turnover rates for staffing.
We’ve already addressed this in our blog post: Calculating Temporary Staffing Turnover – It’s Complicated.
The real issue that probably needs more focus is “root cause.” Precisely, what is the root cause of turnover in temporary staffing? And, which is more important to focus on, in terms of a solution; turnover rate vs. root cause. Let’s summarize Turnover Rate.
Turnover rate is really just a metric. And it’s relative. For your industry and staffing workforce, it may be one number while for another agency and industry, it might be something entirely different. The two relative factors to consider are:
- Turnover for the service your staffing firm provides relative to the rate measured last month or last year. This is likely the most important metric. Why? Well, this relative measure supports your business’ continuous improvement programs, and drives long-term collaborative partnerships with your temporary workforce supplier that ultimately drives sustainable operations, and ultimately sales.
- Turnover for one agency compared to another agency. This is important, but must be a comparison of apples to apples. Different firms use a variety of ways to calculate turnover. Don’t just take the staffing firm’s word for this number, look deeper to understand how it was calculated. Be consistent to compare one firm to another using a common calculation method. Rates that are unbelievable (too low, or too high) should raise your suspicion that something is awry. This relative measure is critical for short-term sales growth when market cycles rely on quality and delivery which in turn requires an efficient and effective contingent workforce.
Both of these turnover aspects are important – the key is that they must be consistently understood by both client and staffing firm. And, a clear understanding between how each affects “short-term sales wins (growth)” and “long-term sustainable profit-producing client relationships.”
It’s easy to find a lower markup to pay for staffing needs, but it takes guts supported by management forethought to get the right workforce at effective and efficient bill rates to sustainably achieve long-term corporate goals.
In the long run, root cause is more interesting. It is the single most important factor that can stabilize your operation in terms of consistent results and quality output. It’s also the single most important factor you can control. We think of these three contributory elements.
- Direction. Host employers’ supervisory staff directing temporary workers is critical to retention (and reducing turnover). It’s sometimes hard to look internally for a root cause, but in exit interviews with temporary workers who have left the job, this comes up quite often. When it’s a trend, your staffing firm should be open and honest enough to tell you. Temporary workers in host employer environments that put integrated workforce practices of inclusion (training, team-building, opportunity, and so forth) far outpace those that consider and treat temporary workers expendable. Compare your managers’ turnover rates for both temporary and full time employees. Compare these rates with each other, and across all managers, and look for anomalies.
- Pay. Competitive pay for temporary workers is as important as competitive pay for full time employees. If your workforce (temporary or full-time and in terms of pay rates or workload) is where you squeeze to increase profits, expect quality to suffer, and output to decline. Temporary workers are attracted by the company across the street for only a small increase in pay per hour for the same work. Ultimately, your company’s results will be affected if turnover is driven by less-than-competitive pay rates for similar work at your competitors.
- Provider. It may also be your provider of staffing services. They may be sending substandard applicants that did not pass the basic skills testing, behavior and attitude screening or other requirements you specified. if you have great direction, and competitive pay, staffing agencies that operate this way are not there to help you meet your goals. It’s time to call Barton Staffing Solutions.
The root cause of turnover may be a combination of two or all three of these factors. Human Resources professionals know how to dig in and can work with management to best understand the root cause, and develop a plan to solve turnover issues in temporary staffing in your operation.
Barton Staffing Solutions has always focused on providing flexible solutions that meet client expectations. We sometimes surprise new clients by asking tough questions about corporate goals and how direction, pay and our service as a provider can combine to ensure success in achieving those goals.