Three bakers in a year: The central bakery on Mill Lane bakes through the night for all three of Lena's shops. The night shift starts at 2 a.m.: Priti, the head baker, and six bakers.
Last year three of the six bakers left, and every time one did, Lena had to advertise, interview and train someone new. Marco asks the obvious question: is three a lot?
Three on its own means little. Three leavers from a team of 200 is almost nothing; three from a team of six is half of it. So the count is turned into a share of the team.
How many staff leave in a year, as a percentage of the staff the business normally has, is its labour turnover:
Labour turnover = number of staff leaving in a year ÷ average number of staff × 100
Working it out for the night shift
Count the leavers
Everyone who left the night shift during the year: three bakers, all of whom resigned. A baker who retires or is dismissed (2.1.5) counts too: however they go, every leaver counts.
Find the average number of staff
When only the start and the end of the year are given, add them and halve. Every leaver was replaced, so there were six bakers in January and six in December: (6 + 6) ÷ 2 = 6 bakers.
Divide and multiply by 100
3 ÷ 6 = 0.5, and 0.5 × 100 = 50%.
Say what it means
Half of the night shift was replaced in one year: one baker in every two left and had to be found, hired and trained again.
Divide by the average: When the start and the end differ, still use their average, never one of them alone. A team that grew from 20 to 24 had an average of 22 through the year, not 20 and not 24.
Count only the leavers: People who joined do not go in the formula. To keep six bakers after losing three, Lena hired three. Those three are the cost of turnover, not part of the rate.
| Last year | Leavers | Average number of staff | Labour turnover |
|---|---|---|---|
| Night-shift bakers, Mill Lane | 3 | (6 + 6) ÷ 2 = 6 | 3 ÷ 6 × 100 = 50% |
| Counter staff, all shops | 1 | (10 + 10) ÷ 2 = 10 | 1 ÷ 10 × 100 = 10% |
| The whole company | 4 | (22 + 22) ÷ 2 = 22 | 4 ÷ 22 × 100 = 18.2% |
Same owners, same pay rates, very different numbers. The whole-company figure, 18.2%, hides where the problem is: staff are not leaving Lena's Bakery in general; they are leaving the night shift at Mill Lane. That is where to look for the reason.
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Lena sat down with each baker who left and asked one question: why are you going? She asked the bakers who stayed as well.
A short conversation with someone who is leaving, about why, is an exit interview. The answers came in three kinds.
Pushed out: problems in the job (push factors)
- Nights from two in the morning, paid the same as day work
- After two nights of induction (2.1.3), new bakers learn only by watching
- Feedback that only ever comes as criticism
- No way up: nobody has ever been made senior baker
- Working alone at an oven all night
Pulled away: something better elsewhere (pull factors)
- Goldcrust's new factory pays $1 an hour more, for day shifts
- A supermarket bakery nearby offers every weekend off
- A café job with the chance to train as a pastry chef
Life moves on (personal reasons)
- Moving to another town with a partner
- Retiring after thirty years of baking
- Going back to college full time
Where the reason sits decides what Lena can do: Push factors are inside the bakery, so Lena can change them: the pay for nights, the training, the feedback.
Pull factors are outside. She cannot stop Goldcrust paying more, but she can make staying worth more than going. Personal reasons she cannot change at all, and should not try.
The two kinds usually work together. A baker who dreads the next night shift (a push) starts reading job adverts, and Goldcrust's advert for day shifts at $1 more (a pull) gives him somewhere to go. Take away either one and he might well have stayed.
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Is 50% high? A rate is judged against something: the business's own past, other parts of the business, and similar businesses.
| Compared with | Labour turnover |
|---|---|
| The bakers the year before, when they still baked in the shops (one left) | 16.7% |
| Lena's counter staff | 10% |
| Bakers at other bakeries in the town | about 20% |
| Lena's night bakers this year | 50% |
Against all three, 50% is high, and it has tripled in a year.
| Replacing one night baker | What it pays for | About |
|---|---|---|
| Finding someone | An advert, reading applications, two interviews (recruitment and selection, 2.1.2) | $400 |
| Training them | Two weeks working beside an experienced baker, both paid (induction, 2.1.3) | $1,400 |
| Bread that goes wrong | Loaves that burn or come out misshapen while the new baker learns | $500 |
| Covering the gap | Overtime for the bakers who work the empty shift until someone starts | $200 |
| Three leavers in a year | 3 × $2,500 | $7,500 |
The costs that do not appear on the bill: A shop opens at seven with no croissants because the new baker was slow. Regular customers notice, and some try Goldcrust.
The bakers who stay cover the empty shifts, get tired, and start looking too. High turnover feeds itself. And every leaver takes their experience with them: the baker who knew the old oven's hot corner has gone.
High labour turnover
- Costs. Recruitment, selection and training again and again; overtime to cover gaps.
- Quality and output. More mistakes and waste while new staff learn; experience walks out.
- Morale. Those who stay carry the extra work and feel it, so more of them leave.
- But it brings. New people with new ideas and skills, and a chance to replace weak performers.
Low labour turnover
- Costs. Little spent on hiring and training; the team knows the job.
- Quality and output. Experienced staff work faster, make fewer mistakes and know the customers.
- Morale. A settled team that trusts each other.
- But it brings. Few new ideas, a wage bill that creeps up as pay rises with years of service, and a team that finds change hard.
The right level is not zero: A bakery that never loses a baker never hires one with fresh ideas. Some turnover is healthy.
The question is whether turnover is higher than it should be, where, and why. For Lena the answer is: yes, on the night shift, and her exit interviews say why.
Lena's first idea is a Night Baker of the Year trophy. Marco points at the exit interviews: nobody left for lack of a trophy.
Why they actually left
- Nights pay the same as days.
- New bakers were left to learn alone.
- Goldcrust offers more.
A fix works only if it answers the reason people go.
Lena's plan for the night shift, cause by cause
Pay more for nights
An extra $1 an hour for every hour worked at night. It answers the push of unsocial hours and the pull of Goldcrust's day rate. It costs about $14,000 a year for Priti and her six bakers.
Support new bakers properly
More than the two-night induction (2.1.3): two weeks beside a named experienced baker, with a checklist. It answers 'nobody showed me', and costs little more than the bakery already spends.
Rotas people can live with
Two nights off together every week, and the chance to move to days after a year. It answers the tiredness that makes people start looking.
A way up
A senior night baker post, and a talk every three months about how each baker is doing (appraisal, 2.1.4). It answers 'no way up' and feedback that is only ever criticism.
Keep measuring
Exit interviews carry on, and Lena works out the night-shift turnover every three months. If it does not fall, the reasons will say which part of the plan is not working.
Is the cure worth it?: The night premium alone costs about $14,000 a year. Turnover costs about $7,500 in adverts, training, spoiled bread and overtime. On those numbers alone, the premium costs more than the problem.
What the $7,500 leaves out
- The empty croissant shelves
- The customers who drift to Goldcrust
- The tired bakers who are next to go
Lena's judgement: Start with the cheap fixes that answer the most common reasons (induction, rotas, a way up), and add the premium if the rate stays high.
That is the pattern for any business: find out why people leave, fix the causes that are inside the business, answer the pull from outside only as far as it pays, and keep measuring.
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How this comes up: Labour turnover usually arrives inside a case. Staff are leaving, or are expected to, and you use it.
How it shows up in a case
- A manager's style drives workers away, and the cost of replacing them cuts profit.
- A new way of managing is forecast to raise turnover, which is one of its costs.
- A growing business cannot keep its staff.
- A plan to stop people leaving has to be judged.
The short questions
- Define labour turnover.
- Explain one or two of its consequences for the business in the case.
- From a table of staff numbers, calculate it.
The four-mark pattern
- Name the first consequence. Recruitment and training costs rise, because every leaver has to be replaced and the new starter trained.
- Show it in the case. Three night bakers to replace in a year, about $2,500 each: $7,500.
- Name the second consequence. Quality and output fall while new staff learn.
- Show it in the case. New bakers burn loaves and fall behind, so shops open without croissants.
Cause or consequence?: Why the bakers leave (unsocial hours, too little support, Goldcrust's pay) is a cause. What their leaving does to the bakery (costs, quality, morale) is a consequence. Answer the one the question asks for.
Tie each point to the case: 'It raises recruitment costs' is one mark; 'three night bakers a year to replace, at about $2,500 each' is two.
Explain two consequences for Lena's Bakery Ltd of the high labour turnover on its night shift.
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