Metric 6.1: Voluntary Turnover
Objective:
To improve retention of quality supply chain staff
Calculation:
| Number of supply chain staff who voluntarily left the department | ||
| x 100% | ||
| Average number of supply chain staff in the year |
Target:
3-7% voluntary turnover
Background Details
Rationale
Like any hospital department, the supply chain department is only as good as its people. The rate of voluntary turnover of employees reflects the supply chain department’s ability to keep its valuable workers.
Employees voluntarily leave a department or organization for a variety of reasons, including:
- Job role is not challenging or interesting;
- Lack of support from supervisors or senior executives;
- Better career opportunities and/or compensation elsewhere; and
- Lack of ongoing training and skills development or limited job progression opportunities.
Monitoring the rate of employee turnover and conducting exit interviews to determine reasons for departures allows organizations to identify and implement improvements to reduce the incidence of employees voluntarily leaving the organization.
Benefits
Financial Stewardship: Recruitment and training costs represent a significant expense for hospitals, which tend to have fewer recruitment and training resources internally than private industry. As a result, there is a significant financial benefit in cost avoidance of retaining valuable employees.
Employee Productivity/Satisfaction: Employee turnover can have a negative impact on remaining staff. Satisfied, motivated employees provide better customer service and help attract higher-quality recruits to the organization. Employees who are engaged are also much more productive than those who are bored or frustrated in their positions.
Underlying Leading Practices
Senior Management Support: Senior management’s consistent, visible support for the supply chain department and any improvement initiatives contributes to greater organization-wide understanding and appreciation of the supply chain department’s role. This contributes to supply chain staff’s success and pride in their work.
Transition from “Transaction to Interaction” Mindset: The focus of the supply chain department needs to be shifted from processing transactions to serving and providing specialized expertise to customers and building relationships with customers and suppliers. This will create more satisfying work for supply chain staff, identify strategic opportunities for process improvements, and provide better overall value to the organization.
Commodity Specialization: Establishing buyers as specialists responsible for specific product types as well as specialized roles improves staff knowledge and expertise, allowing them to provide better customer service to customers. This enhances the customer’s respect for their supply chain colleagues and the supply chain employee’s satisfaction with their role.
Development of iSCM Skill Sets: Organizations should encourage and support additional training to ensure individuals are reaching their potential for growth and establishing expertise in supply chain leading practices. Investing in employees to improve their skill sets enables them to contribute on a strategic level, providing more opportunity for staff to challenge themselves, contribute to the organization’s success and advance their careers.
Target Considerations
Establishment: Targets may need to be revised depending on an organization’s size. Large, often urban, organizations tend to have large departments with regular employee turnover, while smaller, remote organizations often have smaller departments with infrequent turnover. When an employee leaves a small department, the percentage change spikes dramatically relative to years with no turnover. This can make comparisons between large and small hospitals difficult and insignificant. As a result, it might be appropriate to consider hospital size in setting targets for this metric.
Related Metrics and Standards
| Related Metrics: | Related Standards: |
|---|---|
| 2.1 Average Cost to Issue a Purchase Order 2.3 Operating Costs as a Percentage of Expenditures 3.3 Number of Purchase Orders Placed per Full-Time Equivalent in One Month |
1.1 Purchasing Policies and Procedures 1.3 Boilerplate Contracts and Key Legal Principles 4.1 Customer Survey Tools and Processes 6.1 Job Roles and Specifications 6.2 Performance Appraisal Process |
Implementation
Calculation Parameters
Calculation:
| Number of supply chain staff who voluntarily left the department | ||
| x 100% | ||
| Average number of supply chain staff in the year |
| Variable | Include | Exclude |
|---|---|---|
| Number of supply chain staff who voluntarily left the department | Include all individuals who voluntarily resigned from a role in the supply chain department (defined below) either to leave the organization or to transfer to another department within the organization and all retiring employees | Do not include:
|
| Average number of supply chain staff in the year | Include the average number of employees (include full-time, part-time and casual employees) in a one-year period within the following supply chain areas:
|
Do not include employees from the following areas:
|
Data Accessibility Rating
EASY – Data are available for computation
Possible Data Sources
Electronic
Human Resources Module:
Human Resources should track and be able to provide in budget reports, the number of employees working in the supply chain department at the beginning and end of the year, to determine the Average number of supply chain staff in the year.
Human Resources should also track the number of employees who leave voluntarily to determine Number of supply chain staff who voluntarily left the department.
Manual
The Average number of supply chain staff in the year can be measured manually by taking a head count at the beginning and end of each year to calculate the average number of employees. Human Resources or the supply chain department administration should be able to manually track the Number of supply chain staff who voluntarily left the department.
Implementation Challenges
Challenges:
- For small organizations where there are fewer supply chain staff doing multiple roles, it may be difficult to separate out the true number of full-time equivalent staff involved in only supply chain roles. To provide consistency both year over year and across multiple organizations, hospitals should adopt a common method of calculating the average total supply chain employees in a year.
- Some supply chain staff might lack the abilities or motivation to learn the new skills required for success in more strategic roles. Annual employee performance appraisals are an important mechanism for assessing the alignment of personal and organizational goals. If misalignment is found, a change in duties for the individual or additional training should be considered.
- Initiatives to change an individual’s duties could contravene union employee contracts. It is important to keep open lines of communication with human resources, especially in any initiatives involving changes to employee roles where they should be consulted.
- Organizations undertaking significant change initiatives should consider more frequent measurement of this metric to track the impact of these changes on employee morale.
