by Tiina Saar-Veelmaa, psychologist, work culture designer
I discovered an interesting paradox while developing management tools over the past three years: Most organizations no longer calculate the actual costs of their work force. For example, it’s not known how much it costs to replace one carelessly managed valuable employee who leaves, not to mention the costs of stupidity and bureaucracy one encounters in companies which outwardly appear to be innovative.
Happyme is software my team developed to optimize employer- and employee well-being and satisfaction. When we were developing it the first task our team set for itself was based on a simple premise: If you know how big your work force expenditures are, and if you know your employee turnover, you can calculate the amount of money you’re losing every day. Let’s take the example of a company with 78 employees who each earn 2,500 euros per month gross. Add an additional 500 euros per employee spent on training and tools. Assume the company’s annual employee turnover is 12%. Since replacing an employee usually requires six months’ salary for recruiting and an adjustment period, this company can save nearly 140,000 euros annually if it could avoid half of its replacement recruiting.
So why this waste? First, because in personnel management we lack the habit of using predictive analytics. Usually, the departure of an employee cannot be predicted by the employer. If a valued employee announces her departure, then we “buy her back” if possible, even when the situation is less about money and more about lack of interesting work or flexibility. Second, because human-centered-, inclusive-, and participatory management cultures are popping up everywhere. Many organizations still operate in silos and with top-down management structures, even though there are plenty of new management models which could be used. The problem is compounded by the fact that an unsatisfied worker isn’t capable of giving his best and poisons the work atmosphere and colleagues alike. Third, things go awry when a company’s HR function is one small, soft system which is part of other systems, instead of a strategic part of management. Signs of this are when the HR department does not have its own budget, when the HR chief is not a part of management, or when there is no personnel function at all.
Stupid bureaucracy and long meetings
One mark of a wasteful organization is the long forms used in satisfaction studies and employee development discussions. Completing the forms consumes a great deal of time, and employees asked to fill them out generally don’t believe in the forms or the managers’ power to change things. These tools from the 1990s are still found in banks and manufacturing companies alike, and even in companies whose products and services are designed to be user-centric. Instead of implanting job design methods into the work process, old methods are returned to with the justification that the the old system was already created and there’s nothing better to use or alternatives are expensive. However, this would be the ideal opportunity to invest in a new recruitment system for replacements: a human-centric system that measures well-being and predicts employee departures.
A lot of valuable time can be saved by eliminating poorly organized meetings. As the lean methodology consultant Jari Pekka Kukkonen recently suggested at a conference sponsored by the business daily Äripäev: jettison the hour-long meeting. An effective meeting can be had in a half-hour: stand for the meeting, appoint a moderator, and only invite relevant personnel. The next step is to review the economics of information and admit that e-mail used for primary communication creates noise and consumes people’s time. Instead, use Slack or another modern communications platform. Be on the guard for hidden waste, too. It’s created when people don’t comprehend the big picture behind their job, or the “spiritual component.” Understanding the meaning behind the work helps not only understand your job better, but it helps you organize intuitively.
Jobs not needed
In today’s hiring culture, the Y and Z generations are not only asking employers what help they’ll get towards realizing their full potential, but also what kind of green career the employer offers, what efforts are being undertaken to combat global warming, and which environmentally-friendly and healthy practices are used in the company. Young people tend not to choose jobs which encourage overconsumption, nor do they favor employers which avoid social responsibility. I’ve counseled young people who opposed working in fast fashion, predatory loan companies, the yellow media, and hard-sell brokerage firms. I’ve worked with young people who refuse jobs as false-eyelash technicians or cocktail straw manufacturers – even when there is a clear market demand for the products. Young people want their work to leave a beautiful footprint, rather than just being a cog in the capitalist machine.
Viktor Trasberg, University of Tartu Associate Professor of Economics, recently wrote in Estonian Public Broadcasting’s website that Estonia should not introduce a hypermarket culture, because this is the equivalent of burning our work force. With Estonia’s unemployment rate at 5.3 percent, most of our country’s large supermarkets lack cashiers, and Trasberg believes smaller, local markets operated by the same chains are a solution to avoid of the mass importation of foreign workers. I am in full agreement.
Many work as cashiers because they simply lack other opportunities. Professional pride is gone from this job – in Soviet times cashier work was prestigious – and the task has become machine-like and dull. Recently I was standing in line at a large supermarket to pay. A customer asked the cashier if she was new, since the customer hadn’t seen her before. The cashier replied that she’d been working there five years already, and had worked five years before that in the store’s warehouse. As a work happiness researcher I couldn’t leave this remark alone. I interjected that if the checker had been there ten years already then the employer must be very good. The cashier leaned toward me and whispered, “Actually, they’re not a good employer. They’re very bad, very bad. And the wages are terrible. Nobody wants to come to work here anymore. Look at the shelves in the warehouse; there’s no one working. But tell me where I can go? I’m already over 50.”
This is only one sad story of a workplace where management does not champion employees’ value and dignity. Management that would approach its employees with an eye to economics might reason like this: Transition from the large-supermarket model to smaller neighborhood markets; close the shops at a reasonable hour; add more automatic checkout machines; train cashiers to be product consultants who help you find what you need, help you make choices, and advise on purchases.
The hiring costs calculator can be found here: https://www2.happyme.ee/calculator_est/.