Resource Churn

Resource Churn

There are many reasons why businesses see staff churn. A change in operating model, new regulations, mergers and/or acquisitions, to name just a few. Whatever the cause, there are always many hidden factors and unforeseen implications beyond just simple monetary costs.

Most monetary costs, such as gardening leave, interim staff, agency fees, etc. are relatively easy to track and yet, other costs are often overlooked. The costs of diverting management time, into the hiring effort of both interim and permanent staff. The loss of productivity, while interim staff are found, brought on-board and get up to speed. The period of time that a new permanent member of staff takes to get integrated into the business. Studies indicate that a new hire can take 20-30 weeks to reach full productivity and some new hires go through ten or more interviews before an offer is made.

Other impacts can be harder to quantify. For example, costs of productivity dropping off during an exit period and the productivity impact to those potentially picking up additional responsibilities when colleagues leave. There are also, the impacts to your HR team when bringing on a number of interim and permanent staff. In parallel, the impacts to existing projects, commitments and deliverables from existing resources trying to manage additional responsibilities during a period of high churn. Another hidden dimension is the short and long-term impact to the morale of a workforce faced with significant change and staff churn.

During these periods, it is often the most capable individuals that not only consider if now is the time to seek new challenges, but often they are also the ones approached by headhunters. The main risk being that businesses can lose the key staff, that are core to their operational functioning, and strategic agendas during a key period of evolution.

Developing a churn strategy is always a productive risk management approach. Particularly in times of re-organisation or merger & acquisition. Events where leadership and management input from committed and motivated employees is vital to achieving the board’s desired outcomes.

If your company is undertaking a change and you would like to understand more about the risks of staff churn and learn how to develop a churn strategy, please contact us here at Transition Dynamics.

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