PLANSPONSOR Magazine, January 7, 2010, Thursday

PLANSPONSOR Magazine

January 7, 2010, Thursday

PLANSPONSOR Magazine

Customers Lose in High Turnover Work Units

A Cornell University study has found a direct link between clients’ satisfaction levels and the number of new workers with whom customers have to contend.

Researchers doing the study for the Cornell University Center for Advanced Human Resource Studies found that operating units with a higher level of employee “churn” fall short in meeting clients’ needs.

“When turnover is low, the number of new hires in a work unit doesn’t really impact customers’ service quality perceptions,” the researchers declare in a study summary. “But when turnover is high, the number of newcomers is crucial – the more new workers in a group, the more unhappy customers are.”

The researchers concluded that:

The more new workers there were in a unit, the more problem­atic turnover was for the unit, and the more unhappy custom­ers were.

A high level of turnover in larger work units caused service to deteriorate more than in smaller work units. Concentrating newcomers in large units increases the harm to the units’ efficiency and effectiveness.

Group cohesiveness did not seem to matter in this setting. No matter how well- or poorly-bonded the work group, a high turnover rate meant that customers reported less than high-quality service.

“In order for service firms to succeed, HR practitioners must better understand employee churn and find ways to minimize its disruption of customer service,” the researchers wrote. “It’s possible to manage turnover in ways that keep good service flowing to customers. Uncovering the truth about turnover is key.”

Authoring the Cornell study were John Hausknecht, assistant professor of human resources, Cornell University ILR School (Indus­trial and Labor Relations); Charlie Trevor, associate professor of management and human resources, University of Wisconsin-Madison; and Michael Howard, chief executive officer, Em­ployee Insights.

The study focused on 75 work units and data from 5,631 employee surveys and 59,602 customer surveys.

The study summary is available here. The full study can be ordered here.
Fred Schneyereditors@plansponsor.com