In the company, which employs 150 people at line and supporting positions + 12 managers at the lowest level, 6 at the middle level and 3 at the highest level, the fluctuation is at 30% level among the line and support workers, and at 20% level among managers. Their minimum costs are as follows:
- Line employees: 150 x 30% = 45 persons x 24 months x salary of 2,000 = 2,250,000
- Managers (lowest): 12 x 20% = 2.4 x 36 months x salary 4,000 = 360,000
- Managers (average): 6 x 20% = 1.2 x 6 years x salary 10,000 = 860,000
TOTAL COST OF fluctuation is: 3,470,000 PLN !!!!!!!!!!!!!
If the company that labor costs is at 20% level, employment of 170 people according to these rates amounts to 25 million PLN of company’s costs. Assuming that the company generates 10% of the profit, which is about 2.5 million. Savings from lower staff turnover at 50% level can approximately amounts to 1.7 million PLN, so they increase the company’s profit by 68%!!!!!!!!! This is one of the highest „hidden costs” that companies bear!
Just telling to yourself: „should, therefore, minimize fluctuation,” in a general statement is merely bordering with philosophizing. Good news, however, is that among the multitude of ways, methods and systems are just few key areas which not only minimize fluctuation, but mainly bring your business operations on a completely different track. One of these areas is proper management of the company. Managers are the key to the effectiveness of business ventures. The goal which we set to ourselves at the beginning of the work is to change the paradigm of management so that on questions as given below answers come quickly and without hesitation – be aware of what the effectiveness and loyalty mean to your people:
- What changes bring promotion for a managerial position?
- Where managers receive real driving force that makes their teams work with them?
- What word is an absolute and indisputable basis for management, mentioned by most business people around the world?
- What are the two main factors for evaluation of the manager’s work?
- How does delegation work and why managers need to delegate consciously?
- What are the 2 main tasks of a manager?
- What word replaces previously used by the managers: ‚control’?
- What is a motivating driver for employees?
- What is the one manager’s action that discourages employees in a long term?
- What character is the greatest enemy of management?
- How to carry out a motivating reprimand?
- How does work consciousness for a professional manager?
Let’s go straight to the point
In Poland, there is still a belief that „good management” is a skillful balancing among two areas: the „carrot and stick”. Such a mechanism was used for more than 20 years in Poland and nowadays is ineffective! Therefore, the efficiency level of managers is very low, employees’ level of frustration is high, and therefore the level of employee turnover is also high.
Today, every manager should be aware that consequences cannot be replaced by punishment and pressure, since these tools and mechanisms reduce the motivation of employee! Model „stick and motivation” is an anachronism that is ubiquitous in the Central European countries, causing the productivity and efficiency of work at a low level. There has been a rotation of 90 degrees (see figure above). It creates a requirement for managers to acquire the skills and tools that will enable them the introduction of such a model. These tools include: Time Management and Thinking and Acting Systemically (knowledge you just need to learn) and the ability to communicate effectively on a foundation of controlled (mastered) emotions (the competences to obtain and practice).
Focus on changing current paradigm of participants. We learn precise mechanisms of thinking, acting and speaking, whose essence and effectiveness can be seen in the simplest professional situations. Developing these mechanisms for daily practice brings to our participants invaluable results and satisfaction.