The ultimate killer of productivity in Singapore

What is the ultimate killer of productivity? Many business leaders in Singapore responded with, “machine breakdown, lack of skills, conflict, mindset or even stress.”

No one replied, “the ultimate killer of productivity is when one of their best people leaves.”

Of late, the Singapore government has indicated that, “productivity is the only sustainable way to increase our value-add and grow our incomes and it must be the key driver of our economic growth” (source: Ministry of Manpower website). Compared to countries like the United States and Japan, Singapore's productivity level is 50% - 60% lower for key sectors like manufacturing, services and construction (Source: Enterprise One website).

Many government schemes encourage productivity through training, automation, innovation and intellectual property development. Little attention is paid to the productivity contributed through employee retention.

Consider this – when an employee leaves, the talents, experience, know-how, relationships with clients are gone. How long does it take to recruit someone else? How long will the new person take to perform at the same level? What about additional training costs? The time invested by the manager to interview, onboard and coach the new staff?

How much does this cost the company – not just recruitment costs, but the loss of productivity and performance in the process? These are hard costs. The hidden costs are much higher. The relationships with customers, accumulated experience, the tacit know-how are lost, or to make matters worse, they could go to your competitors. The departure of a good staff has an impact on the morale of the others and can influence others to think of leaving too.

Mercer estimates that it costs 200% of the annual salary to replace talents. The more specialized the role, the higher the cost.  The survey by Globoforce found that 45% of employers in Asia Pacific report difficulty in filling positions compared to 34% globally. In tight labour markets in countries like Singapore and China, replacements sometimes take 6 to 9 months to fill.

Furthermore, Towers Watson research in 2012 showed that 34% of Singapore employees want to leave current employers within the next 2 years, higher than global average of 28%. So companies in Singapore have higher risks of losing their employees.

So, the bottomline is keeping your people is good business. It increases your company’s productivity tremendously.

Consider this next question – when do managers ask what can I do to keep you? When they give their letter. We know by which time it is too late. Beverly Kaye, co-author of Love ‘Em or Lose ‘Em, says companies should do stay interviews instead of exit interviews. A stay interview is an engagement conversation between the manager and employee. It goes something like this, “You have made valuable contribution to the team and I want to see you develop further in this company. What can we do to keep you?”

It is a simple but not an easy conversation. Asian managers tend to more task oriented and spend more time on getting things done than finding out what is important to their staff. Many assume that keeping people is just about pay or promotions. So they would rather not open a can of worms or raise expectations that cannot be fulfilled.

However, research shows pay can attract a new employee but it does not retain. Other factors such as challenge, career development and great colleagues are the top three stay factors. Managers need to ask employees so that they do not need to guess.

For example, a manager in China shared, “I did a stay interview with one of my staff, she is a promising rising star in my team. Salary was not her most important factor, instead, what she wants is to learn about other business units, so I connected her to other business units. In fact, after my stay interview with her, she went on to conduct stay interviews with her own staff! Wow, when someone is really engaged, the initiative and outputs really come forth."

Some managers have the will, but not the skills. HR’s unique contribution to increase productivity is to help managers keep their people. Doing a stay interview is a good start. 

So imagine if your best employees stay and are engaged, what happens to productivity?