Key Points

• If you run a business with employee retention concerns, Lean Six Sigma can help.
• There is no question that employee retention is a growing problem across the country.
• Gathering data using Lean Six Sigma will help with organizational decisions.

One of the biggest challenges any company faces is employee turnover. Depending on the company’s size, the time and resources spent hiring, training, and upskilling employees and then having to do it again when an employee leaves can add up. For this reason, many organizations are looking at how they can combat employee turnover. 

Enter Lean Six Sigma, which may be one of the more unusual suggestions about retaining employees. However, it’s far more impactful than perks like ping-pong tables, nap breaks, and unlimited free lunches. Okay, the lunch perk might be great, but it still means that companies must look at practical solutions to keep employees happy, not just superficial ones. 

What Is Lean Six Sigma? 

It’s helpful to understand precisely what Lean Six Sigma is and how it can combat employee turnover. A successor of sorts to Six Sigma, Lean is a fork of the original process improvement approach, but it has since become something of its own. Incorporating ideas from Toyota’s lean manufacturing from the 1950s, Lean Six Sigma is arguably now just as popular as Six Sigma. 

The main focus of Lean is combining the focus on quality from Six Sigma and molding it with Lean’s focus on being more efficient. Lean also heavily uses data to help streamline processes, increase customer value, and reduce overall organizational waste. 

The hope is that Lean Six Sigma is the best of the two approaches, Six Sigma and Lean, and turning it into something better. It’s fair to say that Lean Six Sigma is now the most popular methodology across any organization that wants to streamline its processes. Businesses of all shapes and sizes, from healthcare to higher education, have seen the benefits time and time again.

Why It’s Important to Retain Talent

Setting aside Lean Six Sigma for a moment, it’s essential to understand why retaining talent should be a primary focus of any organization. Attracting and retaining top talent is one of the most crucial elements of any business. 

The idea is that the more skilled employees a company has, the more likely it is to thrive culturally and economically. When a business allows for an environment that focuses on continuous improvement for the organization and its staff, there is every reason to believe this company will see reduced turnover. Better yet, employee retention improves employee morale, allowing the staff to gain more confidence and jump into the company’s mission. 

The two most important considerations may be that the company sees decreased hiring and recruiting costs and reduced training costs. The higher your retention rate, the less money a company spends on turnover, which is even more jarring when you learn that replacing a single salaried employee often costs at least one-third of their annual income. 

You also have to consider that the cost of training current employees is vastly reduced compared to hiring and recruiting. The more employees know about a company, the more they can contribute to the bottom line. 

How Lean Six Sigma Creates Attractive Work Environments 

One of the core efforts of the Lean Six Sigma methodology is utilizing the DMAIC, a data-driven improvement cycle that is also a core of Six Sigma. 

Define

In the “Define” phase, any company looking to retain employees should first define what is causing high employee turnover. The most important part of this phase will be pinpointing exactly where retention has become a critical issue and likely using a problem statement to articulate why it’s become an issue. 

The definition phase is critical for helping management shift resources around to complete the project. To accomplish this, a company should be able to identify what its customers and upper management expect, then translate that to team members and new hires to hire smartly and avoid turnover down the road. 

Measure

When you turn to the measure phase, you start by looking at the monthly turnover rate and recruiting and hiring numbers over the last few years. For example, if you see a 25% voluntary exit rate, with 60% of these departures happening in the first year of employment, it would be a good baseline for asking questions.

In many cases, people leave companies for one of three reasons: they are not given the tools to succeed, they lack career development, or they have poor recognition systems. The last and final reason is poor recognition systems, which are generally laughed at online as companies buy their employees a pizza lunch after hitting record-setting profits. 

Companies can also use the measure phase to implement an employee engagement survey to assess their current morale. As an organization starts to piece together all of this data, it can help create a baseline with which to track progress overall that can be utilized to help show improvement in the future. 

Analyze

In the analysis phase, you should come armed with a potential list of root causes of high employee turnover. This means potentially examining the next step to gather more data that would help with future decision-making. 

This data could stem from open-ended questions that allow employees to speak freely about working for a company, such as morale, benefits, working conditions, etc. On the other hand, you could ask closed-ended questions that provide more data with just yes/no answers, like “Do you like working here?” 

The hope is that you can understand what affects employee opinions between these question sets. This could be all about training practices, work-life balance, or whether or not employees feel they are getting support from management. Gathering all of this data, which could come from a non-partisan third-party interviewer, helps analyze patterns that can be translated into determining the root causes of employee turnover. 

Improve

With the improve phase, you are looking at the opportunity to improve on the root causes you have identified by gathering as much data as possible. A good organization might consider establishing a cross-functional team that pulls from the different data sets and answers the questions from the analysis phase.

In this step, an organization might consider rolling out a pilot phase to see where it can start reducing employees’ frustrations and/or concerns. This might translate to something like cutting down onboarding time or removing redundant processes like paperwork around the company.

A company could also consider establishing a peer recognition platform so employees are recognized by their co-workers for going above and beyond, which could improve morale. 

Control

In the last and final phase of DMAIC, the control requires that companies document and institutionalize this last phase of the employee retention work. This means continuing to monitor recruiting, hiring, and, more specifically, employee turnover so that it can be reviewed monthly, quarterly, and annually. 

Every exit interview should be reworked to understand why an employee is truly leaving an organization. Is it because of pay? Morale? Work-life balance? It’s crucial to recognize that if employees are leaving, the company can track whether initial progress has declined to go back and understand why more employees might be leaving. This, in turn, would allow for higher retention if the problems can be re-identified and work put into place to rewind the clock. 

Ultimately, the bottom line with all of these phases is to ensure that employees feel empowered to suggest improvements so they become invested in the work they are doing. Anytime employees have a sense of ownership, they have better morale and go above and beyond to accomplish their work on time and on budget. 

Other Useful Tools and Concepts

Are you looking for other ways to incorporate Lean Six Sigma into your business for support? The good news is that its capabilities as a process improvement method go well beyond employee retention. Any business focusing on quality, customer satisfaction, and process efficiency will stand to benefit. 

The same can be said for companies that want to utilize Six Sigma without the “Lean” component, which focuses more on efficiency, process improvement, and reducing defects in supply chains. The good news is that both play a role, but Six Sigma has stood the test of time for decades for all the right reasons. 

Conclusion 

Rest assured that if you work for an organization struggling with employee retention, Lean Six Sigma can be a good starting point. This is where most companies tend to fall, as they get stuck in neutral before finding the right starting point to uncover why employee retention has become such a big issue. The hope is that within a few months, Lean Six Sigma will have you on the right track to success. 

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