Your company will profit vastly when you plug the dollar “drip, drip, drip” that employee turnover steals from your bottom line.

Too often, executives look the other way and accept employee turnover as a nuisance, but necessary fact of business life. The cost of employee turnover does not show up on a P&L statement making it easy to overlook when analyzing expenses. However, if your business has a revolving door in the HR department, you could increase profits by thirty percent just by better implementing hiring practices and by reassigning employees to jobs for which they are better suited.

Stop hiring the wrong people
One place to plug the leak is to stop hiring the wrong people. Some HR professionals expect to hire two to four people in order to find one who stays six months or more. Anticipating new employee failure, companies have adopted 90-day probationary periods. In short, they have surrendered rather than taking a proactive stance toward turnover.

Turnover – four-step process
As an example of how turnover affects a business, let’s consider a company of 1,000 employees with fifteen percent turnover. In a year’s time, 150 employees will leave and be replaced by new employees. While new employees are usually highly motivated, it takes a while for them to become fully productive because they lack the training and experience that comes with time. Eventually, they will join the fifty-five percent of a company’s employees who are motivated, competent, and productive. That means that in a company of 1,000 employees, only 550 of them are truly productive.

About thirty percent of the company’s employees are in yet another category, one that is an anchor on productivity. These are people who are probably competent, but lack the motivation to become fully productive. Some employees tend to drift back and forth between this group and the group that really is productive. People may be in this category for a number of reasons: they may be distracted by personal or family problems, they might be potentially good employees who have been assigned to the wrong tasks, they might have grievances or be disgruntled about a work issue, etc. Whatever the cause, one of three things will eventually happen.

• Some will continue to perform marginally and manage to hang onto their jobs
• Others’ performance will improve, moving them back into the productive group
• Still others will turnover and either quit or be terminated.

In this example, annual turnover is 150 people, necessitating the hiring of 150 new employees.

Don’t surrender to turnover. While some is unavoidable, chances are excellent you can cut turnover in half, or more, by using assessments to put good people in the right jobs. You can plug the profit leak by better hiring and by dealing proactively with the people who are marginal performers.

By using tools such as Profiles’ Step One Survey II™ and Profile XT™, employers avoid the mistake of hiring people who will not meet the needs of their organizations. The Step One Survey II™ is the premier hiring instrument for weeding out job candidates who are dishonest, illegal substance users, unreliable, and/or lazy. Profile XT™ is a battery of assessments used to evaluate “The Total Person” and accurately predict success in the company’s specific jobs and positions. Data from Profile XT™ is useful beyond the hiring process and is also valuable for training, managing, career path planning, and other management interests.

Most companies have effective hiring systems resulting in hiring people who have worthy attributes, skills, and training. However, the system breaks down when the qualified person is put into a position that does not quite fit who they are. Instead of job match, this results in job mismatch, which causes the job and individual to suffer, limiting the company’s productivity. Use of Profile XT™ with customized job benchmarks assures greater compatibility between employees and the work they perform.

The importance of job match cannot be overemphasized. Of all the predictors of job success, none is more important. Yet it is the one ingredient missing from most placement processes.

Invigorating marginal employees
In the “marginal employees” group there are two sub-groups – those who can be resuscitated and those who cannot. The Profiles Performance Indicator™ is an ideal management tool to assess these employees and discover those whose potential for effective productivity is the greatest. The information provided by the Profiles Performance Indicator™ is used by managers to communicate with and motivate more effectively the people under their supervision. It suggests areas in which individuals can use their strengths and positively affect areas in need of improvement. There is even a Motivational Energy measurement that helps the job matching process.

Some managers may find themselves in the group of marginal employees. Profiles has help for them, too. The CheckPoint Management & Development System™ provides managers with detailed 360° job performance feedback reports. A follow-up program, SkillBuilder™, offers a series of ideas for improved performance and action steps for increasing managerial skills and effectiveness. When used in concert with an overall management development program, the CheckPoint™ also yields an Organizational Management Analysis™ report to increase a company’s focus on the activities and projects most important to future growth, productivity, and profitability.

Leaders who recognize the status quo as a threat to their organizations are using Profiles’ assessments to decrease turnover and increase their productivity by reducing the number of employees who are marginally productive. The results speak for themselves where it counts most, on the bottom line.