Article Date: 12/1/2008

Reduce Staff Turnover

Reduce Staff Turnover

The key to retaining your employees is to meet their job-related needs.

BOB LEVOY, O.D., Roslyn, NY


Estimates of turnover costs vary from 25% to 150% of annual compensation, depending on separation (i.e. severance pay, etc.), recruitment, interviewing and training costs — plus the time a new employee takes to reach his or her maximum efficiency level.1 Turnover rates can range from almost 0% to 100% per year and vary among industries and by positions and demographics.

To calculate your annual employee turnover rate, divide the number of employee departures your practice has experienced in the last five years by the number of staff members you've employed during the same period. Then, multiply that number by 100.

"The average cost of turnover is 25% of an employee's annual salary — plus the cost of benefits," says Princeton, N.J. consulting firm Kepner-Tregoe (KT). "Typical benefits amount to about 30% of wages."

For simplicity sake, let's assume an annual salary of $30,000. A total of 25% of that is $7,500. Add the cost of benefits: 30% of $30,000 ($9,000), multiply by 25%, and that equals $2,250 for a grand total of $9,750. This amounts to almost a third of the position's annual salary.

In addition to these substantial costs, turnover results in a huge toll on staff morale and patient satisfaction. Therefore, focusing your attention on improving staff retention rates can accomplish much more than just improving your bottom line. (See: "Why Employees Leave," below.)

Staff retention starts by getting the right people on board — something relative to each practice — and then identifying and addressing the person's unique job-related needs. Although no two people have the same job-related needs in the same order of importance with the same standards of satisfaction, work-life balance and a minimal stress work environment have become increasingly important for every employee.

Here, I discuss these universal job-related needs and how you can meet them.

1. Work/life balance

One of the ways to help employees cope with the stress caused by work/life conflicts, such as not spending enough time on one's self or family, is flexible work arrangements. They are:

Flextime. This refers to any arrangement that gives employees options on structuring their workday or work week. Typically, employers who provide flextime expect their employees to work certain "core hours" of the workday. These employers give employees an opportunity to choose (within certain parameters) their own starting and quitting times — as long as they work the required number of hours each day.

You can utilize flextime for a number of non-time-sensitive optometric-practice positions. Examples: bill collecting, book-keeping and accounting functions. Allowing employees the flexibility to perform these tasks at different times of day, provided the employees satisfactorily accomplish the duties, can help attract and retain quality staff.

Of course, some types of practices are more suited to flextime than others. For example, solo or small practices (those with only a few employees) have a limited degree of flexibility. Medium to large practices, however, may find flextime more appropriate.

Job sharing. Optometric practices have a number of positions, both clinical and clerical, in which two employees can split the responsibilities. The key to this option is good communication between the two employees who become responsible for the total duties required and working out between themselves such details as work hours, work coverage, vacation and arrangements, should an employee become sick.

Human resource managers agree that retaining skilled employees may be the major benefit of "job sharing" to employers. An added bonus: Job sharers are more loyal because they appreciate this flexibility and are willing to go that extra mile. Such loyalty can also translate into better work coverage and productivity than one full-time employee can provide. For example, when a job sharer is out sick or vacationing, the other partner may be able to step in. And, job sharers typically schedule medical appointments and other personal business on their own time.

Why Employees Leave
Employees leave for a variety of unpreventable reasons: a long commute; the perception of greener pastures; partner or spouse relocation; the desire to be a full-time parent; retirement; health issues, etc. In these cases, there may be little, if anything, you can do to prevent employees from leaving.
The preventable reasons about which you can do something:
  • Boredom or lack of challenging work
  • Too many problems or annoyances that occur on a regular basis within a practice
  • Unreasonable work hours
  • Too much pressure
  • No leeway for balancing work and family
  • Lack of appreciation
  • A hypercritical boss
  • Inadequate compensation
  • Something occurred that's "the last straw"
In many cases, a new employee decides to leave a position after being confronted with a dramatic mismatch between the organization's culture, the job itself, the working conditions or the hours, as described during the interview process, and the reality of the job itself.

2. Minimal stress work environment

Job burnout is a form of work-related stress that affects the disposition and productivity of everyone in the practice. Burned out employees grow more and more negative about their jobs, doing the bare minimum required to accomplish the job. They become actively disengaged from their work and often irritable toward coworkers, employers and even patients. They tend to be late for work; call in sick more often and may quit their jobs. On the surface, burnout appears as an employee problem.

Christina Maslach, Ph.D., professor of psychology, University of California, Berkeley, and co-author of "Banishing Burnout: Six Strategies for Improving Your Relationship With Work," says burnout is caused as much by the job itself and the way people are managed as it is by an employee's personality.

To prevent burnout, you must understand what causes it. Here are stress-producing scenarios commonly found in optometric practices:

Work overload. With an ever-increasing need for significant productivity and profitability, hearing employees say, "There's just too much work to do and never enough time to do it" isn't uncommon to hear. In many practices, the pressure never lets up, and neither does the workload.

A slowing economy combined with rising overhead costs complicate the problem of work overload. Many practitioners are so focused on the bottom line, that they cost-cut and downsize. As a result, fewer people must complete a significant amount of work. This results in many employees just going through the motions to get paid and then going home, feeling overwhelmed and frustrated, which eventually contributes to burnout and turnover. Hiring part-time employees is one solution to this problem.

Something else to consider: Work overload sends mixed messages to employees. An example is an optometrist who stresses to his staff to be friendly and helpful to patients while handling an increased workload. That's a tough assignment. If a bottleneck occurs on a busy day, which "role" takes precedence? One solution: Establish priorities with your staff.

Employee uncertainty regarding expectations. When employees are uncertain about exactly what you expect of them, on a day-to-day basis, they experience stress. "My job has not turned out the way it was described to me, when I was hired" is a common complaint. A solution to this problem: Show the job applicant the description of the position.

Inadequate compensation. When employees feel underpaid for their workload, they tend to become demotivated and resentful. Many employees see their compensation strictly in terms of take-home pay — without considering the substantial fringe benefits they also receive. To solve this problem, educate the employee about how much you're actually paying him or her by providing a year-end benefits statement. Often, this has an immediate and highly positive impact on morale, motivation and staff retention.

Hard learned lesson

Perceiving your staff as individuals worthy of respect and recognition and also as your practice's most precious resource is pivotal to retaining talented people, and through them, attracting even more.

By identifying and addressing the job-related needs of your employees, your practice will likely hum with hard-working people who enjoy their jobs and stick with you. OM

1. Webber, Alan M. "Firms Will Pay When Workers Make Escape" USA Today 11 April. 2004: A-21.

Dr. Levoy's newest book, "222 Secrets of Hiring, Managing and Retaining Great Employees in Healthcare Practices," is published by Jones and Bartlett Publishers. E-mail Dr. Levoy at

Optometric Management, Issue: December 2008