How can a cost-per-unit model help with turnover?

February 24, 2020 Casey Nighbor

Turnover is a problem that plagues all employers. But turnover in the manufacturing, distribution and fulfillment sections can be even more costly.

Learn how a cost-per-unit (CPU) staffing model can help mitigate turnover in your business.

What is the cost of turnover?

While it’s difficult to calculate the true cost of turnover, you can ballpark the number for your operation on a variety of factors.

  • Time to replace a hire: Depending on your location and job requirements, finding a new hire could take up to 12 weeks. In the meantime, you’re losing money for lost productivity when positions are open
  • Time to train a new hire: Getting a new hire up to speed can take months depending on the job tasks. Studies have shown that it can take employees up to 9 months to be truly productive and efficient at their job
  • Lost productivity: Having missing associates can mean a drop in productivity and efficiency
  • Cultural impact: High turnover rates can have a negative impact on employee culture. Not only does it cause reduced morale but it can impact how long associates want to stay working for your company

How can a CPU model help?

A cost-per-unit staffing partner takes the burden of turnover off you. With this model, they are responsible for hiring and training associates and maintain productivity at no additional cost to you. You pay only for output and not headcount.

Another key component of a cost-per-unit model, such as SIMOS, are incentive-based compensation programs. These programs are designed to enhance productivity, mitigate turnover and increase output.

For example, employees are incentivized by cartons processed, earned hours, attendance, productivity or other factors.

These programs are designed to motivate, engage and inspire your team to meet your objectives.

Partner with a trusted CPU provider such as SIMOS to learn how an incentive program can reduce turnover in your operation.

About the Author

About Casey: Content marketing manager, frequently reading, aspiring chef, failed plant mom, connoisseur of tater tots, beauty products and airplane food.

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