Turnover of Personnel Can Be Reduced by 25% Through Good Communication

Good communication reduces personnel turnover in retail shops by up to 25 per cent, according to new research by the University of Cologne and ECONtribute.

The research, conducted by Professor Matthias Heinz, found that personnel turnover can be reduced by simple communication between upper to middle management and from store managers to employees.

In a long-term field experiment, the researchers analysed the quit rate in shops after the CEO wrote a letter to half of his store managers asking them to ‘do what they can’ to take better care of the employees.

As a result, in the following nine months, store managers who received the CEO’s letter spent more time with their employees (an average of 20 minutes a day), while nothing changed in the remaining shops. Employees of the contacted store managers resigned less frequently. The CEO then reminded managers again of the goal and turnover rates dropped again to the same extent.

“The research emphasises the importance of choosing good managers. In principle, they should be able to communicate and interact well with people in order to keep quit rates as low as possible. However, even the uncommunicative, poor leadership style of some managers can be positively influenced by a simple request from the executive floor,” says Professor Heinz.

The research highlights that given limited resources of top managers, it is the middle managers who connect top managers with the operational level, supervisors, and workers.

For this reason, the researchers add that learning more about how middle managers can be influenced to use their time, in a profitable way that also benefits workers, may be of greater importance than realised. Before the experiment, an average of 80 per cent of the 5,500 employees quit their jobs each year.

The research will be published in the top international journal Management Science.