A few years ago, Eric Rabinowitz, president of IHS Helpdesk Service ? a company that supplies on-site contract workers to staff technical support lines at Fortune 500 companies ? discovered that his firm desperately needed to reduce turnover. Working a help desk can be thankless and full of pressure, since callers are often impatient about getting their problems resolved. For this reason, the average annual turnover rate in the help desk industry was at least 50%. Rabinowitz discovered, however, that annual turnover at IHS was approaching 300%! What's more, 30% of new hires at IHS weren't staying three months.
Rabinowitz and SÃ© an Durham, president of Leveraged Technology, the New York City-based parent company of IHS, calculated that it cost the company $3,000 a head to bring on new hires. If they could nudge their average employee's tenure from 3.5 months to just 3.8 months, they would save $60,000. Get the average up to 7 months, and they'd recover $275,000. And that wasn't including the indirect cost of turnover, such as accompanying decreases in customer satisfaction.
IHS needed to attack several problems. One was the fact that most IHS help desk staffers worked at customers' sites. Naturally, they felt more a part of the customer's culture than IHS's. So Rabinowitz created IHS Weekly Helpings, a newsletter that has been faxed to all employees every week since 1997. It offers technical tips and information about the company's various programs and incentives, along with trivia, quotes, and contests.
IHS has also created a new tier of employees, called account managers, whose job is to nurture the company's relationships with both clients and its remote employees. An account manager may place regular calls to each of IHS's field employees to keep them abreast of new policies, ask them whether they are going to the company picnic, or even just say a quick hello. The account managers also make visits to the customer sites and can touch base with the IHS employees there. This helps IHS staffers put a face or, at the very least, a voice on their formerly invisible employer.
After studying the numbers, Rabinowitz concluded that any employee who took part in any of IHS's training programs stayed with the company an average of two years. Meanwhile, any employee who didn't participate in a training program stayed less than half of that time. The impact of training, says Rabinowitz, is "just incredible." As a result, the company has tripled the amount it spends on employee training. Currently, Rabinowitz says, some 60% of employees participate in IHS's training programs, but he would like to see that number reach 85%.
In a further effort to forge a bond with employees, IHS now holds mandatory one-day paid group orientation sessions for new employees working out of the company's New York office. Those sessions include a tour of Madison Square Garden, and Rabinowitz says he attends every one of these orientations.
The multipronged approach at IHS has worked. In 1996, Rabinowitz reports that turnover actually ended up at 115%, not 300%. In 1997, turnover dropped to 65%, a number closer to the industry average. And by the first quarter of 1999, Rabinowitz says that IHS's turnover was running at 23% and that the average employee tenure was up to a year, rather than 3.5 months. Meanwhile, in fiscal 1998, IHS's sales grew to $15 million, while its parent company, Leveraged Technology, reported revenues of $23 million.