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Counteracting the harmful effects of workforce turnover


Organizations are facing increased turmoil in the workforce, as baby boomers are retiring, and younger employees change jobs more regularly. With this transition, knowledge transfer and information storage issues are emerging; when someone leaves the company, critical data and valuable process information leaves with them. Since your business systems are based on people, processes and technology, changing one aspect of that, such as workforce turnover, can make that entire framework unstable and unreliable.

Employee turnover can have a number of adverse effects on your organization. Inefficiencies are typically created when new employees do not know or are not trained on key processes. These inefficiencies often result in higher costs and potentially lower revenues. In addition, your business can be exposed to additional risks when new employees create shortcuts that bypass internal controls.

If the necessary knowledge and processes are not well documented, organizations are at risk of losing key information and spending additional time training new resources. At a minimum, you should implement redundancy plans and take the time to document any key information. It is not a process that organizations typically think about. It does take some initial planning, but that time spent pales in comparison to creating new processes, training new employees from square one or dealing with one-off rogue processes created in haste.

In addition, employee turnover’s impact within your organization can be mitigated by evaluating your current business system. You should take a step back and assess your current platform; a qualified advisor can perform an assessment that offers more visibility into your processes, gaps and vulnerabilities. In many cases, you may not need to automatically backfill job vacancies, breaking the mold of doing things just because they were done a certain way in the past. 

This assessment should seek to answer several key questions about your business, including:

  • Do you have the right people and the right number of employees?
  • Does your current technology make sense and fit your needs?
  • Are your current processes effective and supporting your strategic plan?

In addition, the assessment might signal the need for additional analysis, such as:

  • Workforce planning or organizational review
  • Technology upgrades
  • Process redesign
  • Current process documentation

Workforce turnover can also provide opportunities to make your business more strategic. When someone leaves the company, you may be able to increase your bench-strength by bringing in someone more technologically advanced; or that specific role may be filled by a technology solution and the resources could be dedicated to a more innovative or strategic area of the business.

Implementing technology solutions can help you work smarter and use automation to do things you may have lacked the capacity to do before. Leveraging technology allows your business to be proactive rather than reactive. The more automated your organization becomes, the less time spent on transactional processes and more time spent on strategic processes.

For example, a smaller organization can get bogged down with day-to-day tasks, and can lose focus on innovation and new ideas. However, even with limited resources and budget for new positions, opportunities exist to work smarter and do things you may have lacked the capacity to do before.

In addition to the people aspect of turnover, there are systematic tools that can assist with mitigating some of the above mentioned challenges. Using manufacturing as an example, many companies do not use technology tools to manage their bill of materials, with employees keeping that information in their heads. A modern ERP system like Microsoft Dynamics or NetSuite could serve as a repository to house that important information; if employees leave, it can be transitioned easily to someone else with no loss of data and consistency in process. In other situations, Microsoft SharePoint can also be used to manage documents and facilitate value-added workflows. 

Integrating technology solutions to manage data can also present new opportunities in many areas of your business. From a personnel perspective, a workforce is coming in that is more technologically advanced and more likely to adopt technology that saves time and takes advantage of increased efficiency. Leveraging technology allows for greater mobility, collaboration and ease of access to data. In the current work environment, employees work irregular hours and need connectivity and access to information. Embracing these technologies could help to slow turnover and assist companies in competing for talented resources.

For smaller companies, information technology (IT) is one area where outsourcing may make sense. Keeping up with technology is necessary to stay competitive, and contracting out much of the daily IT tasks necessary to keep the organization running smoothly can allow companies to re-task key personnel. Organizations can also leverage outside resources for organizational design or developing a strategy for key personnel knowledge transfer.

With a large amount of baby boomers approaching retirement age, and younger employees changing jobs more often, your organization must be proactive and plan for employee transition. Employee turnover is a challenge for companies of all sizes; without the proper people, processes and technology in place, businesses typically struggle to retain knowledge and lose chances to become more strategic. You must look beyond just replacing workers to evaluate opportunities to drive change and more efficiency throughout your organization.