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Are Your Employees Preparing to Quit?

A new study shows that changes in employee engagement and loyalty can indicate whether an employee is planning to leave, and these changes may start up to 9 months before an employee quits. In The 9-Month Warning: Identifying Quitters Before It’s Too Late, workplace data analytics firm Peakon and its research arm Heartbeat drew on polling of 30 million employees in 125 countries to help employers spot the signs and mitigate resulting risks.

Turnover and recruitment to replace departing employees is costly for companies. The hiring process can take weeks or months, and includes both direct and indirect costs from paying recruiters to staff time and lost productivity. Training new staff also takes time and money, and losing institutional knowledge when an employee departs can slow operations or, in a worst-case scenario, can even compromise client relationships or handicap major aspects of the company’s business. There can also be reputation costs, especially if the potential applicants see a stream of departures.

The study stresses that decreasing employee engagement—which it defines as “the level of personal investment an employee has in their work”—is an important indicator of imminent departure. Nine months before quitting, researchers found an employee’s engagement and loyalty to the company drop significantly. The study measured engagement by asking respondents, “How likely is it you would recommend [Company Name] as a place to work?” and measured loyalty by asking, “If you were offered the same job at another organization, how likely is it that you would stay with [Company Name]?”

Various factors contribute to a decline in engagement and loyalty, including in some counterintuitive ways. The study shows that respondents considered unchallenging work more of a reason to leave than having too much work. When their work is not challenging, employees’ sense of accomplishment begins to significantly drop 9 months before quitting, while their feelings about their workload stay relatively steady until their departure.

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Additionally, the study found that communication and relationships between managers and employees may be more important for retention than salary level or other factors. Employees are more likely to leave if they feel unable to discuss their pay with their manager than if they feel underpaid, and their manager’s support is more important than relationships with colleagues, feeling at home at an organization or believing in its mission.

When employees believe that they do not have opportunities for growth, they also become more likely to leave. This includes personal growth, advancement within the company and whether their managers encourage and provide pathways for growth.

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“When we feel our role is helping us develop into our best self, it can have an incredibly powerful impact on employee engagement,” the study explained.

Companies can address these factors in a number of ways, including offering training programs and growth opportunities, starting an employee recognition program, implementing more frequent or more in-depth employee engagement surveys and providing additional training for managers. One way companies can incentivize these steps is by tying executive pay and other rewards not just to financial performance, but also to retention.

By ensuring that employees feel challenged in their work, feel comfortable communicating with their managers and providing opportunities for recognition and growth, employers may reduce staff attrition and save on costly recruitment and training.

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Workers Comp Lessons from Major League Baseball

NEW ORLEANS—Bringing workers compensation under central control and greater oversight has drastically changed the cost and efficacy of one of Major League Baseball’s biggest expenditures. Here at the final day of the RIMS conference, Anthony Avitabile, vice president of industry risk management for Major League Baseball, shared some of his insight on implementing a unified workers comp program to reduce expenses while offering better services.

Although not every business has the high-profile brand or famous talent of a professional sports team, MLB’s example offers some valuable lessons for how large companies with different facilities or franchises can reduce workers comp spend and enhance treatment for employees.

Before 2003, clubs operated individually, placing workers comp insurance independently.

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To do so, they called upon varying philosophies related to program structure, medical provider relationships, and off-season indemnity for minor league players who were out of work during a key earnings period outside of the game. Every franchise was fending for themselves when it came to procuring coverage and securing treatment for players. Since 2003, the league has required compliance with a group policy, featuring group insurance purchasing, unified philosophies, and greater information sharing about injuries, expenses and treatment standards. In the year before Avitabile’s program was put into place, total costs incurred peaked in 2002 at about .

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3 million, while costs in 2013 were down to .

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8 million.

Critical components of the new program include a drastic effort to understand and review losses across all franchises, what he called a “relentless” effort to manage the process in every club, incentivizing good behavior and results, and instituting universal standards in the approach to coverage. The league made a unilateral decision to dedicate the greatest spend to best-in-class service providers, for example, concluding that return to maximum medical improvement offered the biggest long-term savings. Seizing on the competitive nature shared throughout the league, Avitabile also issues one-page annual scorecards for the CFO and other executives in the individual clubs and review at an organizational level. These show performance relative to other clubs, highlighting top cost drivers and key ways to improve. A workers compensation quality council was also formed to focus on provider agreements, review complex questions regarding released players, and evaluate and implement in-house physical therapy and rehab operations.

Leveraging the full size and reputation of the league also offered substantial savings in negotiating with providers, which Avitabile cited as one of the biggest areas of savings when managed in advance of any injuries. Partially thanks to volume and ensured prompt payment backed by the organization, these pre-negotiated rates are typically below workers comp state medical fee schedules. Some of his tips for negotiating these provider agreements include:

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Bringing some services in-house also offered considerable savings while maximizing reliable access to top treatment and consistent protocols. The league-wide move to in-house physical therapy instead of third-party treatment, for example, brought total incurred PT and rehab costs down from about $1.6 million in 2002 to approximately $340,000 in 2012.