AI to Reduce Employee Turnover, Part 1: A Practical Scenario

Overview of AI to Reduce Employee Turnover

Part 1: A Practical Scenario

Part 1 - This first article covers:

• An Intro to Employee Turnover
• What is Employee Turnover?
• A Practical Example of AI Applied to a High Turnover Scenario
• Recap of What We’ve Covered So Far

Part 2 - The second article covers a wider range of AI usage examples.

Part 3 - The third article deals with how AI can help seasonal businesses.

By the end, you’ll have a better understanding of how AI can be applied in business to reduce employee turnover and help with seasonal or event driven business surges.

Introduction

Employee turnover can be a costly and disruptive challenge for any organization, it’s an adversary that can silently erode the foundation of a company. As businesses strive to maintain a stable workforce, leveraging AI agents may offer a significant advantage.

This guide explores how AI can help reduce employee turnover, ultimately saving time and resources while fostering a more reliable workforce.

Understanding Employee Turnover

What is Employee Turnover?

Employee turnover is essentially the rate at which employees leave a company and are replaced by new hires. It can be broken down into two primary categories: voluntary turnover and involuntary turnover. Voluntary turnover occurs when employees leave of their own accord, whether for better opportunities, dissatisfaction, or personal reasons. Involuntary turnover, on the other hand, happens when employees are terminated or laid off by the organization. Understanding these distinctions helps businesses pinpoint why employees leave and tailor their strategies accordingly.

The Role of AI in Reducing Employee Turnover

Employee turnover is a pressing issue that costs companies time, money, and morale. AI agents can provide substantial aid in mitigating turnover, utilizing processes such as task coverage and enhanced workflows to build and maintain a stable team.

Consider the Following:

Let’s consider a business scenario and examine how using task coverage and an enhanced HR process could help. Say that your company has five back office staff: a Human Resources (HR) Admin, a Staff Accountant, Accounts Receivable (AR) and Accounts Payable (AP) Clerks, and a Receptionist / Admin Assistant. Three of them are reliable long term employees, but you are constantly cycling through receptionists and AP clerks. We can make a few assumptions here:

• the two reliable accounting staff are regularly covering for the empty AP position while you rehire
• everyone covers for the missing receptionist
• the HR Admin has an inflated workload due to the constant recruiting / on-boarding / off-boarding process for the two back office positions.

You could hypothetically get by without rehiring, but then your reliable accounting staff would be overworked and you’d risk losing one of them as well.

Task Coverage

AI can augment current employees freeing up their time by handling simple or repetitive tasks.

AI offers an opportunity to cover for the receptionist and AP clerk tasks, as well as some of the AR clerk tasks. Here’s how it can be done:

• Receptionist:
  • An AI voice assistant can answer the phones, respond to common caller inquiries and route calls to the appropriate party
• AP Clerk:
  • An AI agent can be built to handle payment requests from vendors
    • Vendor and payment request can be organized into a standard form
      • Incoming emails can be scanned by AI to find the relevant information for the form
      • Incoming calls can be answered by an AI voice assistant who converses with the vendor and gleans the relevant information for the form
    • A database can store all outstanding vendor payment requests with:
      • payment terms
      • due dates
      • number of calls / emails / vendor collections attempts
      • vendor history and priority
      • etc
    • The agent can analyze all outstanding payable requests, compare them to a weekly AP budget, consider factors like payment terms and vendor priorities to find where the company could potentially save money and who needs to be kept happy, then prepare a report of which vendors should get paid each week
• AR Clerk:
  • An AI agent can be built to handle invoicing and collections tasks
    • Customer invoicing can be organized into a standard form
    • A database can store all outstanding invoices with:
      • payment terms
      • due dates
      • total number of outstanding invoices for the customer
      • number of previous collections attempts to the customer
      • customer history and Customer Lifetime Value (CLV)
      • etc
    • Invoice and collections emails can be automatically prepared and sent on schedule, with reminders as payment terms and due dates pass, and collections warnings when appropriate
    • Collections phone calls can be made by AI voice agents as escalations when due dates approach or emails go unresponded to
    • The agent can analyze all outstanding receivable requests, compare them to budgets and cash flow forecasting, consider factors such as customer history and CLV, identify past due accounts and priorities for collections, then prepare a report of customer accounts marked for human follow-up or suspension as well as which customers to call and email for payment to ensure cash flow covers your upcoming expenses

Using AI for task coverage as outlined above:

• the Receptionist duties are covered without other employees having to interrupt their focus on their own tasks
• the AR Clerk can now handle both the AR and AP positions without being overworked
• the Staff Accountant has two accurate reports available and always up to date, so they’re less likely to need Admin Assistant help from the former Receptionist position

Enhanced HR Processes

We’ve already relieved some of the pressure, the HR Admin no longer has to constantly hire for the two back office roles. They do still have Front Office, Management, and other staff who they may need to recruit, on-board and off-board for. They also lost access to an Admin Assistant for extra help, but that’s ok, because AI can streamline some HR workflows just like it did for the Accounting workflows. Let’s discuss the pros and cons of recruiting and on/off-boarding with AI .

• Recruiting

  • An AI agent can be built to streamline recruiting
    • A simple automation uses AI to generate job postings in seconds, tailored to the roles you’re hiring for
    • Another automation automatically posts the job on relevant websites and local job boards
      • There are still some places where human interaction might be necessary, like an ad in the classifieds section of your local newspapers, AI doesn’t eliminate human workers, it only augments them
    • Applicants get an email with a link to a pre-screening interview conducted by an AI chatbot
    • If an Applicant passes the prescreen, they get an email inviting them to a one-way video interview
    • The HR Admin will still need to review the video interviews to decide who advances to the next round, but it will be a smaller group of only the best candidates picked from the entire pool of applicants
    • The AI agent has access to the HR Admin’s calendar and can send an email with a scheduling requests for an in person interview to each applicant who passes the one-way video interview

• On-boarding, Off-boarding and Benefits Administration

  • An AI agent can be built to handle on-boarding of new employees, benefits administration of current employees, and off-boarding of leaving employees
  • A chatbot is available 24/7/365 for benefits admin, it is programmed for and trained on each benefit that the company offers
    • When a new employee is hired, they can have a chat interaction which will ask them all of the relevant questions to enroll them in each benefit, as well as payroll and other new-hire paperwork
    • Documentation can be automated so that employees receive paperless statements for each benefit
    • When Open Enrollment periods are upcoming, beginning, or about to end, employees can receive automated notifications reminding them to enroll
    • The chatbot is always available and since it is trained on each company benefit, it always has time to explain difficult concepts to employees and educate them on the available benefits
    • If an employee still needs help, the agent has access to the HR Admin’s calendar and it can schedule an in person meeting

Conclusion

You’ve now seen a practical example of how AI can be used to build a leaner, more efficient back office. This implementation doesn’t eliminate good workers, it enhances their productivity and creates a better work environment. A quick recap of our scenario:

• Replaced the part-time Receptionist role with a 24/7/365 AI Phone Operator
• Eliminated the need for a part time Admin Assistant
• Streamlined and automated Accounting tasks so that two staff could do the work of three (and in less time)
  • Automated outgoing collections calls and emails to customers
  • Automated incoming collections calls and emails from vendors
  • Automated cash flow forecasting and weekly AP budget estimates
• Eliminated HR task bloat from constantly recruiting for back office roles
• Streamlined and automated HR tasks
  • Automated job posting for open front office and management roles
  • Automated candidate screening and interviewing
  • Automated employee on/off boarding
  • Automated benefits administration

Leveraging AI in the back office offers several advantages, similar to having an extra set of hands that never gets tired. Continue reading to learn more about the many ways AI can help reduce employee turnover in Part 2: Additional Examples!