Using Data and KPIs to Improve Employee Retention
A few weeks ago, I wrote about how impactful data can be for small businesses. And the week before that, I wrote about the importance of employee development. For today’s post, I’m going to show a real (redacted) example of how these two things meet — a real-life, business version of a meet-cute.
Recently I’ve been working with a client on a handful of their business operations pieces. One of them being employee retention, and another being honing in on their particular Key Performance Indicators (KPIs). For the latter, we of course started with the data that the Point of Sale system could offer. Using that and a pivot table in excel, we were able to see the following data about employee performance:
While this data does start to give us some information, it doesn’t quite get us all the way there. There are too many underlying factors and nuance. A running total of sales is great for giving us quarterly or annual totals, but it doesn’t tell us much about the day to day; which is much more helpful in determining performance. With that in mind, I added a few more data points: number of days worked (over the time frame), and then used that to determine the average net sales of each employee per day.
A quick note about forming data like this: It’s important to know that you are comparing apples to apples. It wouldn’t be fair to compare sales if one employee only works on the busiest days and one only works during the slow traffic days. If that is the case, avg sales/day would not be a good metric to use. In this case, we know that all employees are scheduled evenly across type of day, hours, and location.
chart of average net sales per day broken up by employee
When broken down in this we start to get a more accurate picture of how each employee is actually impacting overall daily sales.
So where do we go from here? Firstly, it’s important to note that this may be an important metric, but it is ONE data point. When it comes to employee development, it’s important to not be overly reliant on one piece of information. Other important elements to consider may be: customer feedback, engagement, task list completion (for example, maybe employee D is taking on more tasks that other employees are not wanting to do which would account for their lower sales), etc.
And while it’s only one metric, sales and revenue are a vital part of running a business. With this information, we can start to formulate a strategy to develop employees’ skillsets. Perhaps re-training is needed for Employee D. Perhaps Employee A would be motivated and enthused to get a positive review and a monetary bonus.
Identifying your employee KPIs, and then building programs to promote those KPIs is an example of how we can keep employee retention high. High employee retention is an indicator that individual employees are serving the business well, and in turn, the business is serving them as well.
If you are looking to implement more business operations data analysis and systems into your business, please contact us today for more information.