Reducing Employee Turnover in Your Lab

By Hedley Lawson
Almost nothing can be more frustrating to an optical laboratory owner or manager than the aggravation caused by employee turnover. Employee turnover, regardless whether it is low or high, can be detrimental to your lab and to your customers, and place your lab’s business at risk.

Employee turnover can vary as a result of the industry and location of your lab. For instance, the food service industry and bank tellers typically experience turnover of 100% to as much as 300%. The stress of employee turnover is much greater on smaller optical labs than larger corporations and is often more expensive than one may believe.

It is not uncommon for employee turnover to cost 50% to 200% of an employee’s annual salary. A more accurate method developed by PricewaterhouseCoopers Saratoga Institute uses the cost of hiring and training new staff. Their formula is: Total employee turnover cost = Costs of hiring new employees + Costs of training new employees.

Costs of Hiring and Training New Employees

The cost to your lab when hiring new employees may generally include the following cost factors, plus an additional 10% for such items as background screening:

• Advertising

• Sign on bonus

• Relocation costs

• Management and staff time for interviewing

• Travel expenses

• Pre-employee assessments

• Training time and materials

• Technology installation (email, voice mail, etc.)

• Employee benefit set up

• Training time and qualification

Tips for Reducing Employee Turnover from Price Waterhouse Coopers

Hire the Right Demographic: Is your business properly recruiting the right demographic? Match your company profile with your target hiring group. If you cannot offer career advancement, then avoid hiring career oriented staff. Consider hiring employees who are less concerned with advancement and more focused on their job or profession.

Understand Employee Motivation: Retaining staff requires learning what is important to your employees. Look to the external motivators like recognition and rewards. Remember the internal motivators of purpose and passion.

Read Between the Lines: The real cause of employee turnover usually will not be found in your typical exit interview. Departing employees will provide the usual response of leaving for more pay or a better job. Inquire for deeper meaning.

These 3 tips from PWC to reduce turnover are a good start. Be critical and always look inward because you or another member of your lab team may be the source of the turnover. Make certain your management style is the way you would want to be managed.

The Price of Low Employee Turnover

Employee turnover costs impact your bottom line and the culture of your lab. “The organizations that achieve the most dramatic reductions in turnover and maintain those lower levels are usually the ones where the top executive or owner makes it a priority” says F. Leigh Branham, author of “Keeping the People Who Keep You in Business: 24 Ways to Hang on to Your Most Valuable Talent.” Addressing the issue rests primarily on your shoulders as a lab owner and manager, so take time to review your current lab work environment and turnover. If your turnover has been disproportionately high (overall or in any one department), focus on reducing your lab turnover before it adversely affects your revenue, your profits, your customers and your employees.

[ about the author ] Hedley Lawson is a contributing editor for Business Essentials and monthly contributor at VisionMonday.


Labtalk June 2020