If you've taken one thing away from this course so far. As I mentioned, retention of information from this course is challenging, so I'm not taking anything for granted. But if you've taken one thing away from this course so far, I hope is that people are not interchangeable. You don't want to think about your employees is just headcount was all plug and play as long as we have the right numbers in the right places we'll be fine. Instead, it really matters who your employee, selective staffing is important. You need to really invest in the skills that they have to make sure they're able to develop and deliver the customer experience you want to be able to deliver the seamless logistics that you need to operate productively. You invest a tremendous amount in getting the right people into the right place. The last thing that you want having done that, is for those people to leave. Yet they do. Something that we find across economies, particularly in the US, is attrition is a serious problem for organizations. People constantly leave. What I've put up here is some slides on US turnover by industry. Slightly old data. This is from 2019. Just because I thought given the pandemic, 2020 data would be a little strange. But as you can see, turnover varies widely by industries. The government, interestingly enough, is right down at the bottom. Government, you're seeing fewer than one in five people leave in the average year. But if you look up at the top at some of the service industries, arts, entertainment, and recreation, getting numbers of 80 percent. Some of this may be very seasonal work where people are more likely to leave. But throughout, a lot of industries have turnover attrition rates of, up to of 40 percent. Retail trade, we see up there around 50 percent. In fact, a Korn Ferry report suggested that among part-time associates, attrition rates are around 75 percent. What does that mean? In the average year, about three quarters of the staff will leave, and you'll have to go out and hire other people. Given the costs of hiring, given the cost of investing in people, this is going to have a tremendous impact on your organization. As a how we drive down attrition matters? I talked about on average, for part-time sales associates, about 75 percent attrition rate. Some organizations may get that as low as 10 percent. Where you are on that scale is going to have a big impact on the value of your training. It's useful to think a little bit about what attrition does, the importance of getting it down. Important to think about, why people leave and important to think about what we can do about it. Let's talk just very briefly about the cost. Probably seems obvious that attrition matters. I want to underline that, there's a lot of research that really it doesn't. We've seen many studies over the years trying to understand how much attrition so the proportion of people who leave in a given month in a given year matters to organizational performance across industries. It has different impacts on different outcomes. Customer satisfaction and quality are the two that are most impacted. Maybe not surprisingly, these are probably two of the areas we're really understanding what you're doing, understanding the organization, understanding its products, understanding how to make them really matters. Even productivity is impacted. Financial performance as well. Financial performance is a little lower. In part that's just because there are so many other things that are also going to impact financial performance, so we might have very low attrition, but if nobody wants to buy our products, or if we've got a very good competitor, or if our input prices have just rocketed, we're going to have lousy financial performance. It's harder to move with people. But still we see the higher attrition goes, the worse our financial performance. We see this across industries. We see it across settings. Is there some optimal level of turnover? Maybe for attritions too low, I'm not weeding out my low performance and maybe I want the edge it up it, but no. We see consistently, the more attrition you have, the worse your performance. Then if this attrition gets higher, has an even bigger impact on performance. Certainly, I've talked a lot about development. The more that you invest in that development, and the more you invest in your people, the more damaging that attrition is. If you want to run a partnership model, you do need to think about what are we going to do in order to get that attrition down.
