What Your Employees Don't Know Can Kill You

Your business could easily suffer the ignominious metaphorical death Star Trek the Movie bankruptcy or dissolution if new employee orientation consists of directing fresh hires to the bathroom and little else. During some recent process analysis work, the Customer Research Center examined the impact of new employee orientation on retention, service quality, and productivity. In each of these three areas it was obvious that informal orientation and training programs create costs which dwarf any reasonable investment in conference call rates formal and effective training.

Retention varies widely based on the tenure of the employee. Within the first two years, new hire attrition can easily run fifty to one-hundred percent. Employees with three to five years of tenure attrite at rates well below 15%. Some of this affordable auto insurance simple self-selection, those employees who depression treatment it out" over the longer run may be more suitable for the job, more comfortable with the environment, or unable to obtain more desirable employment elsewhere. The CRC's theory is the strongest single causative factor driving retention is competency-but, more about this in the final paragraph. These differential attrition rates impose Airplane! significant impact on your overall hiring costs.

Service quality is impacted in an equally disadvantageous manner. New hires are often trained using an ad hoc OJT program without a defined SOP. Formal classroom training is seldom provided outside of high-volume operating center environments. Ad hoc OJT (On-the-Job) training means that more experienced employees are training the less experienced employees. However, without a defined SOP (standard operating procedure) variations are introduced and the thoroughness of the training is seldom assessed. Variations in the training result in variations in the way work is done, which leads to results that either fail to meet customer expectations or introduce errors into the final product. Because the training is informal, none of these impacts on accuracy and quality are measured until they actually hit the customers and your reputation for service quality is critically damaged.

Finally, there is a productivity loss because of learning curves impacts. Even relatively simple jobs have a learning curve that results in lower productivity and quality while employees learn the new environment and their new job. Assuming the learning curve is six weeks at 50% average productivity, the annual impact for a 30-position staff group with an average annual salary of $40,000 and 50% attrition is just over $34,500. This figure is just lost productivity and doesn't include all the ancillary impacts mentioned above that involve lost client value.

An effective employee orientation program minimizes these costs while maximizing the rate at which employees achieve competency. This competency factor is critical. The root cause of all the costs discussed above is attrition. One of the major root causes of attrition is lack of competency. Most new hires want to feel competent in their lives and competent in their jobs. Without an orientation program that includes a basic introduction to "how" to do the job, not just "what" the job is, and a competent well-trained mentor to guide them to success, new hires develop conflicts between their desired state of activity and their current ability to execute. Even though their performance is improving steadily, most weeks, they don't have the perspective or the measurements to see this happening. How many times have you seen a new learner initiate a complex task, only to give up just as they were starting to see progress? Piano students, gymnasts, insurance salesman, the list goes on. For a business, the lack of an effective new employee orientation and training program drives a mounting sense of frustration and another costly round of attrition.

Steven Grant is a former customer service executive from American Express with over 25 years devoted in Fortune 500 companies analyzing, improving and delivering on enhanced customer experiences. Read additional information on effective management strategies at www.customerresearchcenter.comhttp://www.customerresearchcenter.com or email Mr. Grant at href="mailto:scgrant@customerresearchcenter.comscgrant@customerresearchcenter.com

Copyright 2008, Lotus Pond Media