How a manager cut man power turnover – a case study


In 2000, Monica was promoted to district manager for KK Ltd., operations in Hyderabad. She was responsible for Rs. 250 cr in revenue, 2300 workers, and the processing of some 45,000 packages an hour. When she took over in Hyderabad, she faced a serious problem. The Man power turnover was out of control. Part-time workers who load, and sort packages and who account for a considerable part of the city’s work force, were leaving at the rate of 50% a year. Cutting this turnover rate became her highest priority.

The entire KK organization relies heavily on the part-time workers. In fact, it has historically been the primary inroad to becoming a full-time employee. Most of KK’s current executives, for instance, began as part-timers during their college years, then moved into full-time positions. In additions, KK always treated their part-timers well. They’re given high pay, flexible working hours, full benefits, and substantial financial aid for college. Yet these benefits or compensation did not seem to be enough to keep workers at KK in Hyderabad.

Monica developed a comprehensive plan to reduce the turnover. She focused on improving hiring, communication, the work place, and supervisory training.

Monica began by modifying the hiring process to screen out people who essentially wanted full-time jobs. She reasoned that unfulfilled expectations were frustrating the hires whose preferences were for full-time work. Given that it typically took new part-timers 6 years to work up to a fulltime job, it made sense to try to identify people who actually preferred part-time work.

Next, Monica analyzed the large database of information that KK had on her district’s employees. The data led her to the conclusion that she had five distinct groups working for her—differentiated by age and stages in their careers and these groups had different needs and interests. In response, Monica modified the communication style and motivation techniques she used with each employee to reflect the group to which he or she belonged. For instance, Monica found that college students are most interested in building skills that they can apply later in their careers. As long as these employees saw that they were learning new skills, they were content to keep working at KK. So Monica began offering them Saturday classes for computer-skill development and career-planning discussions.

Many new KK employees in Hyderabad were intimidated by the huge warehouse in which they had to work. In order to lessen that intimidation, Monica improved lighting throughout the building and upgraded break rooms to make them more user-friendly. She turned some of her best shift supervisors into trainers who provided specific guidance during new hires’ first week in order to help new employee adjust. She also installed more personal computers on the floor, which gave new employees easier access to training materials and human –resources information on KK’s internal network.

Finally, Monica expanded training to supervisors who had the skills to handle increased empowerment recognizing that her supervisors most of whom were part-timers themselves –were the ones best equipped to understand the needs of part-time employees. Supervisors learned how to assess difficult management situations, how to communicate in different ways, and how to identify the different needs of different people. Supervisors learned to demonstrate interest in their workers as individuals. For instance, they were taught to inquire about employees’ hobbies, where they went to school, and the like.

By 2004, Monica’s program was showing impressive results. Her district’s attrition rate had dropped from 50% to 6%. During the first quarter of 2005, not one part-timer left a night shift. Annual savings attributed to reduced turnover, based largely on lower hiring costs, are estimated to be around Rs. 100 lacs. Additional benefits that the Hyderabad district has gained from a more stable workforce include a 20% reduction in lost workdays due to work-related injuries and a drop from 4% to 1% in packages delivered on the wrong day or at the wrong time.

Monica in the above situation was able to analyze the situation comprehensively and gradually built up the confidence of the work force step by step. She has not taken any drastic steps in a hurry to antagonize the workmen or supervisors. A good manager must first study the existing situation, compare with what was happening, identify problem and then evolve a practical solution. The manager must do this keeping various other aspects affecting the organization as a result of the planned solution which may necessitate some changes. Monica has absolved herself well in the above case.

  • venkatesh

    Nice one