Employee turnover plagues many consumer-service businesses, and it has a significant impact on expenses and productivity. It takes time to identify the right candidate and a significant investment to interview and integrate him or her effectively into the team, which means losing talent affects the bottom line.

Consumer financial services provider Advance America, a Spartanburg, S.C.-based company with 5,800 employees, is familiar with this issue. For years, its turnover rate climbed partly due to rapid growth and associated employee management challenges. By 2006, turnover had peaked at 104 percent, which pushed voluntary turnover costs to $33.4 million in 2007.

During a business review in June 2006, then-CEO Ken Compton charged his HR leaders to reduce the turnover rate by at least a third, decrease associated costs, refine the talent acquisition process and ensure hiring practices more closely reflected the company’s core business priorities.

To obtain a shift in turnover rate, Advance America needed to employ a companywide plan to align talent management practices with business goals. To do this, it developed a multifaceted strategy to understand the root causes of high turnover and built a retention program into its candidate recruitment process. By 2010 voluntary turnover cost had been reduced to $13.9 million, a $19.5 million reduction over three years.

Turnover Transparency

First, Advance America established a turnover measurement system. This enabled it to create a turnover rate benchmark and closely monitor rate changes throughout the year.

To understand why employees were leaving, the company created an exit interview program and implemented it throughout its 2,350 locations in the United States and Canada. Operated by a third-party vendor, this Web-based program enabled the company to obtain information about causes of employee exit and communicate that feedback to operational leaders.

Advance America also developed and deployed an employee engagement survey that could be issued regularly to determine employee sentiment. The first survey was issued in 2006 and again in 2008, 2009, 2010 and 2011. The surveys were voluntary, anonymous and netted an average 72 percent participation rate.