How Implementing Of An International Internship Program Can Reduce Turnover By A.H.Lostocco

www.internship4america.com

On two recent consulting engagements I was asked by my clients to address in my presentation how the implementation of an internship program could help them solve some of their staffing problems. In both cases they fully understood the commitment that they would be making to provide management training for the candidates chosen. Which they had no problem with, but would like to understand what benefits if any they would receive in return. One client was in the Hospitality industry and owned 9 hotel franchisees. The other was in the retail business and owned 27 outlets scattered over three states.

When pressed both clients said that their biggest staffing problem was turnover. They felt that most business owners did not realize the cost associated with turnover in a business. To start with there is the very obvious expense of training a new employee on the business, its operating systems and the franchise business philosophy. This costs the employer in two ways first he has to use one of his other employees to train the trainee; while this is happening the employer is paying two for the work of one. Second, in many cases he has to cover the shifts of the employee that left with another employee who may have to be paid overtime (1 ½) to cover the shift. And third the employer is loosing productivity and may experience negative reactions from customers or hotel guests who have to deal with a new and inexperienced individual.

To address their concerns and to demonstrate how an internship has hidden benefits that can accrue to them I started compiling informational materials on turnover rates in the US. The following statistics are very eye opening and self-explanatory:

Annual U.S. Voluntary Turnover by Service Sector

US Department of Labor Statistics June 2009

Total US Turnover 23.4%

Financial Activities 16.4%

Financial and Insurance 15.5%

Real Estate Leasing 19.6%

Professional &Business 18.6%

Education and Health Service 13.5%

Health Care and Social Asst. 19.6%

Leisure and Hospitality 52.2%

Accommodation and Food Service 56.4%

Manufacturing 16.5%

Retail Trade 34.7%

Construction 28.7%

Private Industry 26.5%

Accommodations and Food Service 56.4%

Hospitality 52.2%

Retail Trade 34.7%

Here is how you can benefit. Lets say that one of your hotel operations has a staff of twenty (20) employees. If you assume that based on the statistics shown above that over the course of the year 50%+ will turnover that means you will have to replace at least ten (10) employees during the next year. Now that is a lot of replacing, training and lost productivity. Now assume you decide to use two (2) international trainees in positions you cannot seem to keep filled. Now you can expect to only have to replace eight (8) positions out of the twenty (20) that reduction alone reduces your turnover to 40%. Reducing turnover by two (2) more puts your turnover at 30%. Thirty percent (30%) in the hotel industry is considered excellent. The same holds true for retail operations or for any business type.

Now the question is "How do I know that the international intern will not leave me and go down the street for $0.25 more." To start with the individual is here because you, the host company, has agreed to accept that individual and train that individual per an agreed upon training program approved by the US State Department through an approved sponsoring agency. It is pretty much written in stone as far as State is concerned. Can it be changed to allow the individual to move to a different company? Yes, but it is rare and there has to be extenuating circumstances. Money not being one of them, they are here to train not make money. Can the individual just leave and go home? Yes, but the individual has spent many thousands of dollars for this opportunity the likelihood of this happening is greatly reduced.

Our experience has been if the client makes it his business to provide the agreed upon training and learning opportunities for the individual it turns out to be a successful relationship. If a client attitude is that this is a form of cheap labor that I can exploit to do the dirty and mundane jobs that no one else wants then the program ends up being a failure.

To conclude if you treat a trainee with respect the same respect you expect than you will have a successful program that will not only benefit the trainee but will also benefit you.

To learn more about interns and internship I suggest you read "US Internships for International Students and Young Professionals" by Alexander H. Lostocco you can find it at www.amazon.com

If you have any additional questions feel free to contact me directly at lostocco1@internship4america.com. If you would like to review some of my other articles on instituting an internship program you´ll find them listed at www.internship4america.com. If you have had a similar experience I would like to hear about it.

Alexander H. Lostocco