When a firm is faced with the problem of high levels of absenteeism, it will normally look to its human relations systems for remedies, such as:
- Flexitime- this allows workers some control over the hours they work. This allows workers to arrange times that are most convenient to themselves. It can help relieve the pressures caused by such things as child care of transport problems, which could otherwise lead to workers taking time off as though they were sick.
- Job enrichment- a satisfying, challenging job will ensure that people want to come to work in the morning.
- Improved working conditions- better conditions will make work a more attractive place to be, and cause less dissatisfaction.
- Improved human relation- making workers feel more valued at work and will allow them to feel more committed to their workplace. People who feel part of a team do not want to let other members of the team down.
- More controversially, the firm could institute extra pay for staff who attend regularly in the form of an attendance bonus.
Labour Turnover
Labour turnover is a measure of the rate of change of the firm’s workforce. It is measured using the formula:
Labour Turnover= no. of staff leaving per year
Average no. of staff *100
As with all figures, it would be a mistake to take one figure in isolation. It would be better to look at how the figure has changed over a number of years, and to look for a reason why turnover rate is as it is.
If the rate of labour turnover is increasing it may be a sign of dissatisfaction within the workforce. If so, the possible causes could either be internal to the firm or external.
Internal causes of increased labour turnover could be:
- A poor recruitment and selection procedure, which may appoint the wrong person to the wrong post. If this happens, then eventually the misplaced workers will wish to leave to find a post, which is more suited to their needs and talents.
- Inefficient motivation or leadership, leading to workers lacking commitment to the firm. They will feel no sense of loyalty or ownership of the business, and will tend to look outside the business for promotion or new career opportunities. They will not be interested in looking for new ways in which they can contribute to the firm.
- Wage levels that are lower than those been earned by similar workers in other firms. If wage rates are not competitive, workers will feel dissatisfied by their position. They may look else where to find a better reward for doing a similar job.
External causes of labour turnover may include:
- More local vacancies arising, perhaps due to the setting up or expansion of other firms in the area.
- Better transport links, making a wider geographical area accessible to workers. A new public transport system such as Manchester’s network of trams or Newcastle’s metro link enables workers to take employment that was previously out of their reach.
A high rate of labour turnover can have both positive and negative impacts on a firm. The positive aspects are:
- New workers can bring enthusiasm and new ideas to the firm.
- Workers with specific skills can be employed rather than having to train up existing workers from scratch.
- New ways of solving problems can be seen by workers with different perspective, where as existing workers may rely on tried and tested methods that have worked in the past.
On the negative side, labour turnover can cause firms problems in several ways:
- The cost of recruitment and replacements.
- The cost of retraining replacements.
- The time taken for a new recruit to settle into a business and adopt the firm’s culture.
- The loss of productivity while the new worker adjusts.
On the balance there is a need for firms to achieve the right level of labour turnover, rather than aiming for the lowest possible level.
Analysis of graphs (Appendix’s 7 and 11)
Petrol colleagues have a higher rate of absenteeism because they are away from the Asda family sitting in a pod on their own, not communicating to anyone else except customers, giving them an overall feeling of isolation. Beers, wines and Spirits have a high rate of absenteeism because the work is heavy and very repetitive and colleagues have no follow up Return to Work Interview and so do not feel under any pressure if they have time off work.
The Personnel Office, Availability, Cash Office and Bought in Bread and Cakes have low absenteeism because there are not many colleagues in these departments and so they are more aware that they need to support their team and because of the low head count it does not effect the figures the same.
The Labour Turnover graph shows that the Personnel Office and Pharmacy have both had 100% turnover in 2001/2002. Due to not having a lot of colleagues one colleague leaving has significant effect on the figures. Petrol turnover is high for the same reason as there absenteeism figure. Where as Bakery’s Labour Turnover is high because of working conditions and the job been very repetitive.
The Graph gives a strange result for the Personnel Office putting absence at 0% and Labour Turnover at 100%. This is because two people work in the Personnel Office and one person left and was replaced, then that person left too. This could be because the Personnel Manager is only part time in Kendal store and so colleagues often have to work with out a manager.
From my research the main problem with absenteeism is in the Beers, Wines and Spirits department and Petrol. This could be overcome if the BWS manager conducted Return to Work Interviews putting pressure on colleagues not to go off sick and also by letting the colleague know the effect that their absence has on their colleagues. In petrol is the department manager made more effect to go over and talk to the petrol colleagues, they not feel as isolated and so more not go off sick.
Exit Interview (Appendix’s 13 and 14)
An exit interview is conducted by the department manager on behalf of the company just after a colleague hands their notice in. This should be done within the first two days as if it is left to late colleagues that may not already have done so may have found alternative employment. This interview is done because if there is a problem that can be resolved the colleague may choose to stay hence reducing labour turnover and having to recruit and train new members of staff. If it cannot be resolved on this occasion Asda may be able to change the people policies to ensure it does not continue leading to a lower labour turnover. Appendix 13 is a blank copy of an exit interview form.
I have used this as part of my investigation to show how Asda tries to reduce labour turnover and retain valuable colleagues.
This data (appendix 14) shows me that most people who left the company did so between one and two years service and aged between 16 and 50. Over half the colleagues that left worked between 6am and 6pm and there is no pattern between the number of hours that colleagues worked.
Many colleagues did enjoy good relations with their colleagues but the data for those that didn’t should be of concern to Asda as there are so many that did not enjoy good relations with their colleagues.
Many colleagues thought that their department managers were friendly and approachable as were other managers in store. Training is one area that could be improved with 12% of colleagues unsure if they received adequate training and a further 1% disagreeing but not leaving for this reason and 5% leaving because they did not received adequate training.
All colleagues were happy with the number of hours they worked and most were happy with the days and times of the day they were working. Pay and benefits are areas that need to be improved as colleagues agreeing that they were happy with the pay and benefits was below 80%.
Many colleagues would have been honest with the exit interview as they were leaving the company, but some may have been dishonest because of the person taking the interview or just generally the comments been traced back to them.
Company benefits- analysis
Asda colleagues can expect a pay rise every 12 months if the company hits its profit targets, this is an incentive for colleagues to work harder in order to make more sales, hence, more profit. This is as well as an ever improving benefits package (appendix 16)
Appendix 15 shows that Asda offer the best pay out of the companies researched but this is only after 12 weeks as Marks and Spencer offer £4.50 from the day the employee joins the company. At Sainsbury’s employees have to wait for ½ a year before getting the minimum wage.
In my opinion, Asda has one of the most varied benefits packages out of all supermarkets. This is only possible due to its size and the size of its owners Wal-Mart.
Employees with Asda do not initially get as many holidays as those with Morrisons, but this rises with the length of the colleagues service, and they get a week more than Tesco and Sainsbury’s.
The other benefits with the other supermarkets are mainly based upon finance (loans) and insurance, but at Asda they have a diverse book of benefits (appendix 16) for colleagues to make use of. These have been broken up into 4 main categories: Your Health
Your Lifestyle
Your Car
And Your money.
Absenteeism
Many things can cause a colleague to be absent from work, ranging from actual sickness, sickness of a child, problems getting supervision for children, or an underlying problem from with in the work place e.g. bullying.
On some occasions colleagues do not attend work because they have something else they would rather do e.g. going out on a Saturday night with friends.
When a colleague returns to work they have to have a return to work interview, with their manager, which looks at if the reason for absence is connected to any other absences the colleague has had, e.g. back problems.
Or if there is any pattern to the absence history appearing e.g. regular shifts such as every other Saturday night. Maybe there could be an underlying reason for the absence e.g. problems in work or a domestic issue and so this is also incorporated into the return to work interview.
Then the manger would look at anything that the company could do to help the colleague e.g. lighter duties for a while or shift swaps that can fit in with family commitments.
Hopefully be doing this the colleague will not be absent as much in the future as before.
The first ever supermarket store manager job share launched in 1999 at our Barnsley store.
Asda has also started some new innovations to cut down on absenteeism including:
- Child care leave - available for parents to stop work for a short period during the summer holidays, returning later with continuous service and maintained benefits.
- Shift swapping schemes - available for colleagues needing to be absent from work for specific family or domestic reasons.
- School Starter scheme - a unique scheme that allows parents to take a half day holiday on their child's first day at school.
- Benidorm and Careers Leave - up to three months unpaid leave regardless of job, contracted hours or length of employment while treating service as continuous for our over fifties colleagues.
- Paternity leave is given to all male colleagues irrespective of length of service at or around the birth of a new child.
- Belief leave - all colleagues are offered the opportunity to take a total of two days unpaid leave (in additional to statutory and public holidays) at any time throughout the year to celebrate religious festivals.
This gives department mangers notice with which they can cover shifts and therefore cuts down on absenteeism as colleagues may have once used some of the events listed above to call in sick.
Asda considers 3% to be the maximum acceptable level for absenteeism any more than 3% is considered that the colleague is not for filling the contract they signed when they joined the company and so the company’s disciplinary procedure should be followed.
The disciplinary procedure consists of a verbal warning remaining active for 3 months, a written warning remaining active for 6 months and a final warning remaining active for 1 year.
Alison the store personnel manager at Asda Kendal stated that at present disciplinary procedures are not always followed, but there is now a greater demand on department managers to do this and so more disciplinary action should follow from now on (appendix 1).
What Causes Absenteeism and Labour
Turnover and how can these Figures be Improved
Introduction
I am investigating how labour turnover affects Asda Kendal and Asda as a company. I will also be looking at which departments have highest labour turnover and how these can be improved. I am hoping that my suggestions will be taken on board by the company and by improving will be ale to offer better service to their customers and therefore make greater profits which will therefore be passed on to their colleagues in the form of a bonus which will further motivate them and possibly cut absenteeism and turnover again.
Development
People leave companies for many reasons including a dislike of their job, a dislike of the company and its cultural beliefs and most commonly to go onto a job that pays more or in a more preferred field.
Labour turnover causes similar problems to absenteeism in that without proper staffing, key jobs do not get done and so customers become discontented as they have to wait longer in queue’s and without availability have little if any choice. The knock-on affect has similar consequences on colleagues as with absenteeism.
It is often up to each department manager to where possible minimise labour turnover, this can often be done by talking to colleagues and negotiating terms that would motivate the colleague into staying with the company.
Before leaving Asda, they ask the colleague to fill out an exit interview (appendix’s 13 and 14) which gives the company exact reasons why the colleague is leaving. On some occasions the manager taking the interview may notice a way of re-motivating the colleague (e.g. more responsibility) or the company may be able to chance its policies to stop anther colleague leaving for the same reason.
It costs Asda over £3000 to replace a colleague that decides to leave the company. The main of this figure is due to advertising the post and training the successful applicant. If we don’t train applicants properly the vicious circle (appendix 3) can take effect.
Labour turnover within Asda is calculated using the following formula:
(No. of staff leaving *100
Total no. of staff)
Asda Kendal struggles to recruit colleagues because Kendal as a town traditionally has a level of unemployment of under 1%. So supermarkets, such as Asda recruit people that are in between jobs or students that move on to other better paid jobs or go to university.
In 2002 Asda Kendal finished the financial year with a labour turnover of 40.1%, double the target for labour turnover. So far this year the store is on track for a repeat of this, having a labour turnover of 38.75% in November 2002 (appendix 10).
Labour turnover has been greatest in personnel and in Pharmacy. This could be because colleagues on these departments are on the set hourly wage of £4.85, but they could get paid more for doing this same job in many other companies in the Kendal area, for example Pharmacies and other personnel offices in other big companies, including possibly Morrisons.
So how can companies such as Asda recruit and retain employees? At present Asda has a set wage for all colleagues in the company and there can be no exceptions to this rule, but in compensation they offer a comprehensive benefits package, which they claim is better than any other companies in the market.
Suggestions
In order to recruit more workers they could look to other towns in the area with greater amounts of unemployment (e.g. Barrow workers to Kendal). But uptake on this could be slow as some workers may not want to travel and may not see it as cost effective to travel this distance. To get around this Asda could offer to pay some traveling expenses, but this could lead to other colleagues been upset and leaving the company and so the problem would get greater.
To reduce labour turnover, it is essential to ensure that the right people are chosen to be employed and are put into the position that best suits there talents. This will make the colleague more productive, raising both their moral and the moral of other members of the department, hence reduce turnover all the way across the department. In order to put people into the positions that best suit their individual talents, certain other departments that are in more desperate need of staff may become disheartened but in the long term putting someone into another position that they will remain in is going to lower the other department’s labour turnover as the colleague will not leave as they would have done in the other department.
Good training is essential to the retention of colleagues because as the Vicious Circle (Appendix 3) says, if proper training is not given, then the job does not get done correctly, so the colleague gets fed up and leaves and this is a continuous circle with more colleagues starting and then leaving. Good training takes time and often there is not a lot of time for more training once initial training has finished.
Asda could make some new positions for people to exclusively look after new colleagues e.g. sit with them whilst they are taking a break. This will make the colleague feel part of the team and if they feel part of the team they are likely to stay and develop.
Departments could try flexible rota’s so that if colleagues need a day off (i.e. to deal with a family issue) they can take a day off and make the time up on another day. This is likely to reduce labour turnover and absenteeism, but it could cause managers a problem getting cover for these shifts, so they could recommend that the colleague makes a shift swap with another colleague, but is too many shift swaps are going on it could become impossible to create accurate rota’s.
Recommendations
I would therefore recommend that Asda choose carefully who they employ and on which department they are to work. I also think that it is important the colleague is given the final say on what hours and days they work, instead of managers trying to totally fill the vacancies they have available (e.g. if the vacancy is 5pm to 9.30pm but the colleague only wants to work until 8pm, this should be allowed). Once placed in their department, they should receive the initial training, but this training should not stop here but continue for the rest of their employment with the company.
By doing all this Asda will get the Right Person in the Right Position at the Right Time with the Right Skills (RP, RP, RT, RS). The colleague will remain in the company doing their job correctly, so will be motivated and will stay and develop with the company.
Their colleagues will also be motivated as there will be someone else to share the work load with, therefore they will be more motivated and they will stay and develop more.
Conclusion
Absence and labour turnover is always going to be a problem for companies such as Asda and especially for stores such as Kendal that operate in areas with extremely low unemployment.
In the latest ‘We Are Listening Survey’ (appendix 20) many colleagues said that although they went to work for the money, its was the sense of team work and belonging that made them want to stay with Asda. Maybe Asda could use this information to aim a recruitment campaign at certain sectors of society (e.g. people aged between 40 and 65 who often look for jobs that will last them to retirement, but still make them feel part of the team). This section of society have proven to be the most reliable when it comes to work (Source: The Food Retailer Magazine) and although Asda are not allowed an official policy, they may favour applications from people of this generation. By getting loyal reliable colleagues to begin with, these colleagues are unlikely to leave and add to the labour turnover figures, or be regularly absent and add to the absenteeism figure.
As for the Kendal store, Absenteeism is on target but labour turnover needs to be cut by 50% in order to meet company targets of 20% total labour turnover, and get the greatest efficiency out of the store.
Bibliography
Alison Treptow- Store Personnel Manager, Asda Kendal.
Absence and turnover data, courtesy of Asda
All About Asda, Made and printed by Asda Stores Ltd.
www.asda.com
www.tesco.com
www.j-sainsbury.co.uk
www.morrisons.plc.uk
www.marksandspencer.com
Appendixes
Nicholas Dobson
A study of Asda’s Personnel Performance Indicators
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