Alex Pantich is the Co-Founder of Upshift, an on-demand staffing platform.
getty
In today’s changing labor environment, many businesses and staffing providers are choosing the way they approach their partnerships by allowing for more flexibility in working arrangements. As these businesses change the way in which they do work, though, many are not updating the metrics they use to measure success.
One of the most common metrics to measure success is attrition rate—defined as the number of people who start an assignment who are still working after a set period of time. This is a great metric of success when people are only being placed in full-time assignments with the same schedule each week, but the metric breaks down when you start to allow for flexible work.
Many companies are allowing for flexible work now because it opens a much wider swathe of the workforce to their positions and allows them to attract higher quality employees who already have jobs. Attrition rate doesn’t work well though when evaluating flexible work as employees may take a day or a week off and by traditional attrition metrics it looks like they have attrited.
A more useful method of measuring success in these scenarios is the "return rate."
Based on my experience in leading a flexible labor company that operates in industries with traditionally high attrition rates and a notorious lack of flexibility, I've found that pivoting to return rate as a primary data point has changed the way that we lead. Return rate is the number of shifts that have been filled in a given week by someone who has already worked at that business. Generally, if someone has already worked for a business, there is a much smaller investment to be made in training and managing them than if they are new to the business. This investment is what the attrition rate captures with full-time hires but does not translate to flexible workers.
Weaker return rates have been indicators of two main deficiencies. The first is a general lack of base needs being met, such as pay or on-site benefits like parking, beverages, meals and the like. The second is linked to a lack of management attributed to poor communication, lack of resources and no clear definition of success. Conversely, high retention rates are usually directly correlated to a healthy and productive environment that can capitalize on the evolving way that people want to work.
Simply put, the success of any hiring initiative is the ability to achieve the least amount of vacant positions within an organization while maintaining a tight bottom line. Continuing to measure that success based on attrition rate alone leaves gaping holes in the data that can contribute to ineffective management and poor financial decisions. Rather than measuring the success of your hiring by how many people fail to return during a period of time, consider measuring success based on how many of those people could return or stay onboard if they were offered shifts that fit in their schedule. Many people don’t or can’t maintain a 40-hour week schedule. Some may only be able to contribute 16, 24 or 32 hours a week, but can return to work every week for those shifts. This segment of the workforce is consistently overlooked in the hiring process of current models.
While turnover for any organization is all but inevitable, the data continues to support that employees with an active voice in their employment schedules are increasingly more engaged, productive and most importantly reliable. For instance, instead of filling your vacancies with 10 people working 40 hours a week, envision filling those same positions with 15 to 20 people working modified schedules of their choosing. The end result here is fewer vacant seats albeit using more employees. A high “return rate” is the true measure of hiring success and a healthy work environment. Not all attrition is bad, but bad attrition can be mitigated with empowered employees who contribute to your business.
Forbes Human Resources Council is an invitation-only organization for HR executives across all industries. Do I qualify?
