Cutting Employee Turnover Costs

United States technology company Novell has had some tough times over the past few years. Among them was its 30 percent staff turnover rate. Even by the generally high technology industry average Novell’s turnover level was difficult to manage, according to the company’s Australia and New Zealand managing director Ashley Wearne.
And the induction cost of every individual employed was US$3224. Multiplied by the approximately 1500 people the company employed each year “provisioning”, as they called it, was an expensive exercise for company with enough trouble trying to save itself from commercial demise.
Novell used its software and technology to solve its management problem. Today its individual induction cost is just US$124 and the company has an HR management solution which it is selling to the market. “We didn’t realise just how expensive it was and how long it took for new employee to become fully productive,” said Wearne on one of his recent regular trips across the Tasman.
The initial costs of provisioning new employee with laptop, phone, desk, carpark etc were bad enough but then it took up to two months before they had everything they needed to do the job – from physical access to buildings to network privileges. And other employees wasted time helping the new arrivals get sorted.
Novell found that 17 different systems were be updated every time new employee joined the company. Data for all the entry processes was held in multiple applications and databases, each of which had to be individually updated. The processes were error prone, expensive and inscrutable.
The Deloitte survey conducted in the US found that it takes up to six months to get new employees working reasonably proficiently. It takes 18 months to get them integrated into the culture of an organisation and it takes 24 months before they really know the strategy and the business they have joined.
Given the Deloitte survey results and the complications of the provisioning process Novell’s challenge was to get its people “functioning fast”. Its answer is solution it says has halved its administration costs for managing new staff while providing access to everything new employee needs – from day one.
They call it “Zero Day Start” and the company’s information systems and technology director, Sam Gennaoui, claims they have increased employee productivity by 15 percent.
The system includes immediate access to an office, network account, email, telephone, computer, business cards, badge, security access to appropriate buildings, pagers, mobile phones etc. Employees also get immediate access to service and information based on their role.
“Zero Day Start” is real-time activation and deactivation solution. When employees arrive, leave or are transferred their files are changed instantaneously. “When we talked to clients about what we had developed they said it was just as expensive to take people out of their systems as it was to introduce them,” said Wearne. “They told us stories of individuals who had left or been fired and who still had access privileges months later – simply because the right people hadn’t been notified of their departure.”
The biggest uptake of the concept so far is in the education sector – at universities where thousands of students enrol each year and need managed access to range of services. The increase in online learning means students need access to range of privileges and the sector was “struggling to keep up” according to Wearne. “Provisioning is becoming new area of work for us.”
The applications that could grow from this centralised personnel management approach are significant. Novell is expanding into virtually anything which provides more efficient management of employee access to or deletion from privileges, services and facilities. “As we get more and more technology enabled,” says Wearne, “these systems will give us an increasingly wide range of management solutions.”