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How to Increase Employee Retention With Lean Management Principles

Posted by Insightlink on 10/04/16

Employee turnover is accelerating, and it’s costing employers money. According to the Bureau of Labor Statistics, workers are staying with their employers for a little over four years. The average cost of hiring one new employee can range from $1,000 in services industries to as much as $5,000 or more in professional and manufacturing industries, according to Recruiterbox. This includes costs for in-house recruiters, third-party recruiters, advertising, travel, referral bonuses, sign-on bonuses and relocation.

To avoid wasting thousands of dollars every four years, one effective strategy you can deploy for increasing employee retention is lean management. These principles help you optimize your workplace and reduce your rate of employee attrition.

Lean Management Culture

Lean management culture is based on an approach that can be summed up as a five-step process:

  • Start by reviewing your company’s product families and defining each in terms of the value it provides to the end customer. This step is vital because it orients your company’s entire management process around delivering value.
  • Review the steps that generate the value streams your products deliver. Identify the key steps that create value, and eliminate any steps that do not. This is where the “lean” part of lean management comes in.
  • Tighten up the sequence of value-creating steps so it flows more smoothly to the customer. This involves improvement and optimization.
  • As the improved flow of value gets introduced, let customers pull value from the next step in the upstream flow. This provides a basis for customer feedback on the new, improved process.
  • Implement a cycle of continuous improvement. Keep repeating these steps until all wasted steps are eliminated and the value creation process is perfected.

Workforce Optimization

Workforce optimization applies lean management strategy to managing your workforce. It aims to improve customer experience by using data on workforce performance to analyze and improve staff and operational efficiency. To do this, it incorporates shared objectives, cross-functional process and integrated technologies to streamline how staff handle operational procedures.
For example, if two different staff members from different departments are duplicating the same function, workforce optimization might consolidate their roles into a single department or staff member, creating a more streamlined procedure. Or if staff members working on mobile devices are taking two steps to unlock their phone and see notifications, workforce optimization might reduce this to one step by using the Samsung Galaxy S6 Edge, which enables workers to see notifications without unlocking their phone, increasing operational speed and supporting mobility.
To implement workforce optimization, companies typically apply a few key measures. Key decision-makers are brought into processes, streamlining supervisory procedures. Scheduling is optimized by assigning specific tasks to individuals at a given time, avoiding repetitive duplication that wastes time. Tasks are assigned to the employees with the best-matching skills, improving efficiency. Finally, the best tools are deployed for compliance to make operational steps more transparent and drive results.

Increased Employee Retention

Workforce optimization promotes employee retention
in multiple ways. First, optimization helps size the correct number of employees to tasks and trains workers to add value to tasks. Optimization techniques also help cross-train them to handle multiple tasks within their skill set. This reduces turnover by boosting the performance of employees and reducing the risk of non-performing workers who need to be replaced.

The emphasis on improvement also encourages employee engagement and reduces one of the causes of turnover. Lean managers further encourage retention by incorporating rewards for performance into the management process. Lean management’s emphasis on value also delivers high customer satisfaction, creating a positive feedback loop that motivates staff to stay and thrive.


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