Case Study 2 – Reduced Employee Turnover Delivers $2.0m In Savings

The Challenge

A medium-sized professional services provider reported suffering high levels of turnover of key employees to competitors and the associated increase in replacement recruitment expense. Assistance in identifying core issues for the turnover and an action plan to resolve was requested.

The Analysis

Risks associated with allowing the turnover to continue were identified as:

• continued recruitment expense (financial and time costs)
• loss of collective intelligence
• low levels of employee engagement and loss of competitive advantage impacting on productivity, product quality and morale

One primary issue was identified as the lack of formal process for employee professional development, talent management and career pathways.

The Action Plan

Design and rollout of an Individual Development Plan (IDP) for all employees was agreed as a positive step in demonstrating the employer’s commitment to provide an avenue for employee professional development. The IDP provided a formal process for individuals to identify professional strengths and weaknesses and undertake a process of capabilities and skills development, aligning personal career objectives with the overall goals of the organisation.

Challenges associated with gaining stakeholder acceptance of a new initiative were considered and consultation with management and employees was conducted during program development activities.

This process included identification of pre-existing employee skills, operational requirements, mentors, succession planning and development programs to provide employees the skills toward assuming more senior roles. Information sessions ensured managers and line employees were competent in using the IDP as a relevant and effective professional development tool, benefiting both employee and company.

The Positive Outcome

Rollout of the Individual Development Plan offered the company multiple benefits, including:

• competencies for each role defined and skills gaps identified
• early identification of high performers and improved provision of talent management and career pathways
• improved employee engagement: definition of each employee’s short and long-term career objectives, supported action plans for achievement and increased awareness of how individual effort and performance contributes to organisational effectiveness
• improved employee retention: recruitment savings of $1.95m over a 2-year period