How ISO 9001:2015 Can Help Attract, Develop and Retain Great Employees

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When you're running a business, you understand that recruiting and retaining excellent staff is a critical ingredient for success. High staff turnover can have a significant impact on the efficiency and productivity of your organization and have an adverse effect on your bottom line. Constant churn can also pose risks to your intellectual property and information security.

Boushey and Glyn (2012) analyzed over thirty case studies[1] and found that for most industries, the cost for replacing an employee averages out at 21% of their salary. When you have a constant churn of critical positions, the expense of finding and training suitable new employees can escalate rapidly. In addition, your business wastes valuable resources that could be applied elsewhere, and the strain on other team members rises, spreading discontent.

ISO 9001:2015 provides a framework which, if applied with long-term sustainability as a goal, can make your organization a more attractive employer, and address many of the reasons that cause staff to leave.

We examine how applying different aspects of the ISO 9001:2015 standard will support, empower and develop your employees and provide them with a work environment they want to be part of long term.

The Costs Associated with High Employee Turnover

Employee costs include much more than just their salary. From the minute the company advertises to fill a position they are investing in the new team member. Advertising, identifying, interviewing, and inducting a new employee takes money, time and effort.[2]

Employee Turnover

If a business doesn't have dedicated recruitment support, these tasks can fall to already busy managers and staff, or they have to seek the services of an external agency which can be expensive.

Besides advertising fees, and the salary or fees of those doing the hiring, the business might also incur travel expenses, sign-on bonuses and relocation costs.

Once hired, the new employee then needs to get up to speed with their responsibilities and tasks. Managers and team members will need to invest time in training and supporting them until they are fully competent, and will likely need to take on some of the load until that happens.

Rollag, Parise, and Cross (2005) cite a Mellon Financial Corp report that shows it can take anything from 8 to more than 26 weeks for a new employee to achieve full productivity, depending on the type of position.[3]

The more complex and critical a role is, the more resources it takes to ensure they are fully trained as the cost of mistakes and rework may be significant.

When turnover is high, there are other costs over and above the financial impact. The effect on other employees and the workplace environment is also significant with repercussions for motivation levels, moral and stress levels.

Why Do Employees Leave an Organization?

If your company has a good reputation with consumers for producing top quality products and services, past and present employees for having a positive and proactive environment, and as being leaders within your industry, you are more likely to be attractive to top talent.

On the flip side, a company with a poor reputation is less likely to attract good employees even if they pay a premium to others in the same field. In fact a recent Corporate Responsibility survey showed 86% of American women and 67% of American men wouldn't take a job with a company with a bad reputation even if they were unemployed.[4]

There appear to be common themes as to why employees leave an employers despite the variation in individual organizations and industries, and the reasons aren't just about remuneration and benefits or poor relationships with managers, as some sources suggest.[5]

Employees generally value things like:

Clarity in the direction of an organization

Training and development opportunities

Recognition for their efforts

The ability to contribute ideas

Authority to make improvement and changes to the workplace

Open and transparent communication and decisions about change

A lack of confidence in leaders and managers to run the organization effectively can introduce doubts about long term sustainability and consequently make employees doubt their job security.

Feeling that their contributions don't add value, or their opinion, knowledge, and skills are appreciated can also impact negatively on how a person feels about their job.

Frustration that nothing ever changes, despite the same problems occurring time and again, and being unable to contribute to positive change can impact on motivation and morale.

If an employee doesn't get the right training and support to make them confident in their abilities, they may fear they'll make mistakes, cause damage, and get into trouble should they do something wrong.

Get our free guide on 10 Ways to Boost Employee Involvement for Better Outcomes From Your ISO 9001:2015 Certification and build a better, more sustainable quality management system.

How ISO 9001:2015 Can Help Organizations Recruit and Retain Excellent Employees

What is ISO 9001?

ISO 9001 is an international standard that outlines the requirements for an organization's Quality Management System (QMS). The current version is ISO 9001:2015 - Quality Management Systems - Requirements.

The standard is generic and is applicable across all industries and to businesses of any size. If your organization meets all the requirements laid out in the standard, you can get "certified" by an independent body and display the certification mark as proof that your QMS complies. Certification can be an excellent marketing tool to both potential customers and employees.

However, even if you choose to use ISO 9001 as a framework for your QMS, you are under no obligation to seek certification. There are many other benefits you can achieve by adopting the structure, many of which can contribute to decreased staff turnover, better productivity, and reduced costs.

What Are the 7 Principles Underlying ISO 9001:2015 and How Do They Relate to the Retention of Employees?

The ISO 9001:2015 standard is based on seven quality principles.[6] When you examine how these principles guide the standard and what meeting those requirements can mean for employees, it becomes evident how implementing an ISO 9001 compliant QMS can eliminate many of the reasons that cause employees quit.

1 Customer Focus

This principle guides the parts of the standard that require your business to understand the needs of both external and internal customers and organize your business processes to meet those requirements. From an employee's perspective, this focus helps them understand how their actions affect their customers and creates pride in their output. An improvement in customer satisfaction provides a positive feedback loop for their efforts.

2 Leadership

This principle underpins requirements in the standard for your leadership team to establish a clear direction for the organization and create an environment that allows everyone in the business to contribute to your organization's objectives. Your managers should walk the talk, create an environment of trust and integrity, and inspire, encourage and recognize everyone's contribution. From an employee's perspective, this approach builds confidence in the future, clarity around objectives and how they contribute to them, and recognition for those contributions.

3 Engagement of People

This principle underpins clauses in the ISO 9001 standard that stipulate that you include everyone throughout your organization in the development and improvement of the QMS and business processes. Your business gains by utilizing the collective knowledge and abilities of all of your people, rather than a select few. From an employee's perspective, they get the opportunity to be part of the initiative and contribute to improved efficiency and effectiveness. It shows them that their opinion and insight matter and that rules and changes aren't just imposed from above or from an external consultant.

4 Process Approach

This principle promotes an understanding and management of interrelated activities as processes that combine to form a coherent system. A process approach helps your business identify weak links and make logical improvements that take the interrelationships with other parts of the company into account. Your employees get to see the bigger picture and gain an understanding of how their activities impact on the rest of the organization.

5 Improvement

This principle recognizes that your QMS is not static and provides the foundation for clauses in the ISO 9001 standard that require your organization to continually improve. Provided that principle 3 is applied, these clauses mean that your employees:

Can contribute and see their ideas put into action

Experience problems being solved once and for all

Get the opportunity to be part of the internal audit program, which allows them to learn more about how other parts of the organization do things and lets them share their knowledge

Know that when they identify a problem or risk, the organization will take it seriously and do something about it

6 Evidence-Based Decision Making

This principle provides you with a framework for making fact-based decisions using data and evidence. From an employee's perspective, subjective management decisions based on favoritism or a whim can be incredibly frustrating, especially if their knowledge and skills indicate a different or better solution. When your employees see the evidence that supports your decision to make changes and can then observe the results of those changes as demonstrated by data, it provides them with a more logical, fairer and just workplace.

7 Relationship Management

The principle of relationship management underpins clauses in the standard that require you to manage interactions and inputs from suppliers and partners. Although ostensibly aimed at external parties, the fundamentals are also applicable to internal customer-supplier relationships, other stakeholders in the organization and the community at large. Once again, by defining and communicating the different needs of your various stakeholders, your employees will better understand their roles, responsibilities, and contribution to the bigger picture. The concept of the internal customer also enhances the respect and recognition of the needs of different interrelated parts of your business.

Which Clauses in ISO 9001:2015 Directly Relate to Employees and Their Wellbeing

At first glance, it appears only a few clauses specifically address the human resources of an organization.

Clause 5.3 requires that the authority and responsibility for various aspects of the QMS are identified and communicated throughout the organization.

Clause 7.1.2 mentions having the right people to manage the QMS and processes.

Clause 7.1.4 talks about maintaining the right environment to maintain operations and many of the points mentioned relate to the comfort and wellbeing of employees.

Clause 7.2 has a specific requirement regarding competence and requires people to be adequately trained to ensure things run properly.

Clause 7.3 requires that people are aware of their contribution to the effectiveness of the quality management system including the benefits of improved performance.

Clause 7.4 talks about communications structures.

In summary, the standard requires you:

Define authorities throughout your organization

Make sure your people understand their responsibilities and how they contribute to the performance of the organization

Train them adequately

Provide a work environment that supports their wellbeing

As cited above, the absence of many of these things are reasons employees choose to leave an organization.

However, it's not just application of the clauses in ISO 9001 that explicitly mention employees and human resources that can improve staff retention. Almost every clause of the standard will affect your employees in some way.

How ISO 9001 Impacts on Employees

Clauses in ISO 9001:2015 That Impact on Employees

Let's explore each section of the standard, assess the potential impact on everyone throughout your business, and examine how applying the requirements might improve your employee retention.

Section 4 - Context of the Organization

Establishing and communicating the context of your organization provides your employees with a more holistic view of the business and how their role fits in. They'll have a better understanding of the strategic direction of the organization and the external and internal issues it faces. These issues might range from the regulatory requirements you need to meet and the needs of interested parties, through to your organizational values and culture.

Clause 4.4.2 of this section requires that your organization has documentation to support the operation of the organization. In conjunction with clause 7.5, Documented Information, this part of the standard ensures that your employees always have access to up-to-date information to help them do their job correctly. When documents are useful (as required by the standard), they will provide your employees with confidence that they are doing things the right way, reduce their personal risks, and provide them with a baseline from which they can suggest and implement improvements in a controlled manner.

Section 5 - Policy

This section of the ISO 9001:2015 standard requires that your business has a position on Quality; commonly referred to as your Quality Policy. However, more than just have one, the standard requires that your top management communicate the policy to everyone throughout the organization, and assign the necessary responsibilities, authorities, and resources. The requirements of this section provide a fantastic opportunity for you to drive the quality system throughout the organization and get employee involvement and ownership, which is one of the critical success factors for a sustainable QMS.

Section 6 - Planning

This section of ISO 9001 requires that your organization assesses risks and opportunities and makes a plan to address them. Getting your employees involved with this process gives them a voice in the direction of the organization and shows them that you value their expertise. Your organization benefits as it harnesses the collective knowledge and power of everyone, rather than a select few.

This section also contains requirements that you assign responsibility and authority for achieving your business's objectives, you provide your employees with clarity on what they are, and that you assess and allocate the resources required to achieve those goals.

A requirement to implement planned changes and evaluate the likely results of those changes before implementation will give your employees stability and prevent unwelcome surprises.

Section 7 - Resources

Almost every aspect of this section in the ISO 9001:2015 standard impacts on your employees. You must:

Determine what resources you need to run your business processes effectively

Maintain employee competence

Ensure your employees are aware of their roles and the consequences of them not doing things right

Have an effective communications plan

Ensure that employees have access to useful, up to date documentation to support them in their roles

This section is about ensuring that your employees have the things they need to do their job correctly and you have a process in place for everyone to communicate and provide input when changes are required.

Section 8 - Operation

This section requires that your organization determines what your customers want and how your business will provide them with that. It includes the design of new products and services, plus the actual production and service provision steps.

By applying these requirements you'll ensure you address all of these aspects in a planned manner, you have the appropriate controls in place, and there is a process of identifying nonconformances before they get out of the door. The result is your employees will have confidence that they are doing things the right way, their output is sound, and they are producing what both internal and external customers want.

Sections 9 & 10 Performance Evaluation and Improvement

These last two sections of the ISO 9001:2015 standard are all about using data and facts to make decisions and changes. When you apply the clauses based on the principle that problems and mistakes are an opportunity for improvement, rather than assigning blame, you have the opportunity to:

Increase employee motivation

Promote cross-fertilization of ideas and a can-do culture of improvement

Provide professional development opportunities

Give your employees an appreciation of how their role impacts on other parts of the organization

Inspire confidence in management decisions and proposed changes

Examples of actions you can take in response to the requirements in this section include:

Communicating improvements in customer satisfaction levels to provide a positive feedback loop for your team's efforts

Training employees as internal auditors to provide them with an opportunity to observe and learn about other areas within the organization

Engaging staff from the ground up in improvement efforts and training them in techniques to get to the real cause of problems so they can identify more effective long-term solutions

Incorporating data into reviews of the business by top management and making controlled changes based on facts

The new knowledge employees gain through internal audits and improvement projects also provides them with professional development and potentially a route to future promotions.

Other Positive Outcomes

As mentioned above, adopting ISO 9001:2015 as a framework for your organization's QMS doesn't mean you have to go the extra step and obtain ISO 9001 certification. If you do, however, the certification mark is not just useful for marketing to clients, it also sends a positive message to potential employees that you are a quality organization.

Equally (if not more important), having an effective QMS leads to improved productivity which should lead to increased sustainability and profitability. That, in turn, provides your employees with better job security and confidence in the future of the organization.

Another positive outcome should be increased customer satisfaction. As word spreads that your organization produces excellent products or services, your reputation as a preferred company to work for also improves.

On the flip side, not only can ISO 9001:2015 provide a framework that allows your business to become more attractive to top talent, it also makes it less attractive to recruits who might not appreciate the accountability, defined responsibilities, controls, and culture of ownership that an effective QMS implies.

Conclusion

ISO 9001:2015 provides organizations of all sizes, and across all industries, with a robust framework to improve the way they do things. When you use this standard and the underlying principles to develop your QMS, not only will your control over productivity and customer satisfaction increase, your reputation as an employer of choice will also rise.

Your leadership will provide a vision and direction to inspire trust and confidence from your employees, reduce their uncertainty, increase their sense of long-term stability and security, and give them the support they need to do their jobs correctly.

An effective and sustainable QMS, encourages ownership and involvement in the long-term success of the business and gives your people the knowledge that their contributions make a difference.

A QMS and culture that leverages the collective knowledge of all employees to make improvements across the organization is a powerful asset and removes many of the reasons your people might have to quit, reducing your staff turnover and consequently lowering your overall costs for recruitment.

Get our free guide on 10 Ways to Boost Employee Involvement for Better Outcomes From Your ISO 9001:2015 Certification and build a better, more sustainable quality management system.

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    Comments

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    References

    1 Boushey, H., Glyn, S.J. (2016), "There are Significant Business Costs to Replacing Employees", Center for American Progress, Nov 16, 2012

    2 "The Cost of Hiring New Employees (Infographic)", Recruiterbox (2015)

    3 Rollag, K., Parise, S., Cross, R. (2005), "Getting New Hires Up to Speed Quickly", MIT Sloane Management Review, January 15, 2005

    4 "CR Survey: Corporate Reputation Affects Talent Acquisition", 3BL Association, Jan/Feb 2016

    5 Elzinger, Didier, "The Biggest Lie in HR - People Leave Managers Not Companies", Culture Amp Blog

    6 "Quality Management Principles", International Organization for Standardization

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