Human Resource Black Belt Project

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    I have been assigned a project to reduce the turnover rate at my organization.  We, however, have virtually no data on the subject, other than the rate itself.  So before I make this an actual project, I will need to build some measurement systems, first being an exit interview system.
    But how do I come up with the COPQ for an open position?  I know to calculate hiring cost, training cost, termination cost etc., but has someone put a dollar amount on the cost of not filling the position?  This of course depends on the industry, but is there a basic model to follow?
    Any ideas or suggestion would be greatly appreciated.



    I don’t have a specific answer to your question, but I do have an anecdote about a similar recent project in India.  Turned out that the major X was that bachelors were returning to their home villages for arranged marriages.
    The company resolved the issue by creating an intranet dating site; marriages from work couples apparently being acceptable to the family.



    If you will look in your records u can generate data although it’s good to conduct exit interview but it is seen that doesn’t give correct reason for change over.
    From your employee’s data base you canlook in to these data’s such as employees educational ,location,salary,faimly background, stay period in previous company etc. i hope this will give you fair idea.



    Before you get too far I guess I would ask why do we want turnover reduced?  So speculating a bit…
    1)  Build a CTQ Flowdown to look at what drives turndown.  For instance, its often a function of things like associate satisfaction, lack of promotion, salary competitiveness, etc. 
    2)  You can then develop a transfer function Y=f(x) that should help you get at COPQ.  Without speculating too much the COPQ  would equate to the financial benefit, what I often refer to as the Yf and the drivers of cost or lost profit.  In this case ask yourself the hypothetical question of “What is I reduced turnover by 50%”?  Annual training costs would be reduced by 50%, one time startup costs (office setup/admin fees) would be reduced by 50%, and lost productivity.  This is a little trickier, but could be calculated as the difference in productivity of a longer term employee versus a new employee. 
    As an example, in sale process engineering we often find that it takes 12-18 months to “ramp” up a new employee to the average rate of revenue generation of longer term employees.    Therefore, the COPQ of a lost employee is also the loss of the reduced revenue for the 12-18 months of retraining.  Often in sales we also see customer loss associated with turnover.  There should be enough data to show the “rate to average productivity” of new employess that would then help with the business case for reduced turnover.
    Frankly, your bigger challenge is to figure out what is causing the turnover.
    Food for thought.
    Rick Otero
    Bank of America

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