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ITR&rsquo;s Six Sigma Approach to Reducing Its Employee Turnover Rate

Posted: 04/13/2010
Jose Luis Chavez and Veronica Lobo
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The retention of highly specialized talent is key to the success and growth of a business, and ITR, an aeronautics company, maintains the philosophy of committing to its employees. It is for this reason that in recent years ITR has become focused on fully understanding the concerns of the people who shape the organization.

It is very common for organizations to implement action plans to avoid high employee turnover among key personnel. Generally we ask ourselves why people change from one organization to another, and we tend to arrive at the same conclusion: for better economic opportunities. Nevertheless, at ITR we work to understand not only those factors that the competition offers that can cause employees to change positions (we call these "pull factors") but also those factors that can distance employees from their current organizations (called "push factors") to the point that they would decide to look for other employment opportunities.

This mission to better understand these factors led ITR to develop the project "Talent Retention". By using the Six Sigma DMAIC framework, we were able to statistically analyze those critical factors of our human capital. Below are the following steps we took to conduct our analysis.

DEFINE

We define that f(x) = % turnover. Knowing this formula, we created a model that would house all the factors of the greatest interest to our collaborators and that impact positively on the ITR employee turnover rate. This model was the starting point for the development of the Six Sigma project. (Click on image to enlarge.)

Model Retention Factors:

  • Organizational Development
  • Compensation
  • Organizational Culture
  • Motivational Compatibility
  • Workload
  • Management








MEASURE

By completing on-site surveys and interviews, we were able to clearly determine the greatest factors that can cause an employee to stay or leave ITR. We were also able to get a better understanding of what our colleagues liked and disliked the most about the company. Evidently, what employees liked the least were future "push factors" that could result in the loss of key talent to the organization. Not surprisingly, we had to pay the most attention to this part of the Six Sigma project.

ANALYZE

We graphed this information and analyzed it with the desired result of segmenting the populations in order to implement specific solutions with the greatest impact. Once we segmented these populations, we determined those segments that we needed to do a closer analysis of, as shown below:

Populations:

  • Area
  • Seniority
  • Years in the Position
  • Organizational Level
  • Salary Penetration
  • Marital Status
  • Performance
  • Potential
  • Age

(Click on images to enlarge.)




IMPROVE

All of this information wouldn't be useful if we didn’t put into action an improvement plan to mitigate the major factors causing the turnover. At the end of the analysis we implemented short, mid and long-term improvements. Through a Quality Function Deployment we measured the impact of the proposed solutions, with the goal of beginning with those solutions that would either provide the greatest benefit or prevent employee turnover. (Click on image to enlarge.)



After an important corporate communication strategy, two years after the implementation of this first Six Sigma project, ITR has considerably reduced its employee turnover rate. We have gone from a turnover rate of 12.8 percent in 2006 to a turnover rate of 1.83 percent in 2009. We continue to maintain a low employee turnover rate today. (Click on image to enlarge.)

CONTROL

Nevertheless, we know that the job does not end here. For that reason, at the end of 2009 we launched an engagement plan that reinforced this first initiative by implementing new projects covering different aspects:

  • Development and Training
    • Includes initiatives such as development plans, identification processes and talent planning, a "Front Line Leadership" diploma, and specialization matrixes focused on recognizing technical growth
  • Recognition
    • Includes two different initiatives: one recognizing the best developed projects of the year, the second recognizing employees who best uphold in their daily activities ITR’s corporate values
  • Communication
    • Includes BSC decoupling strategy even at the leadership level of the organization
  • Integration
    • Includes initiatives like sporting and social events that help to reinforce organizational culture and synergy
  • Flexibility of work schedule
    • Includes an administration system for work time that gives flexibility to our colleagues
  • Social Responsibility
    • Includes initiatives such as campaigns to help the community around us

In this way, every year we are committed to the retention and development of our human talent.


Thank you, for your interest in ITR’s Six Sigma Approach to Reducing Its Employee Turnover Rate.