The impact of employee turnover on workflow in a production team.

Name and surname: Łukasz Szkutnik

1. Introduction

In a modern production environment, maintaining a stable and efficient workflow is crucial for achieving performance goals and ensuring high product quality. One of the main factors affecting this stability is employee turnover - the rate at which team members leave and are replaced by new personnel. Frequent changes in team composition can slow down the production process and increase the workload of experienced workers. This study applies system dynamics modelling to examine how employee turnover impacts workflow efficiency.

2. Assumptions and Description of the Simulation Model

In the production department, the implementation of quarterly targets spans 60 working days. To achieve the production goal, employees must generate 10,000 base man-hours, plus an additional 5 man-hours for each new production order. At the beginning of the quarter, the company employs 72 production workers.

According to demand forecasts, 50 new orders are expected per day during the first half of the quarter, and 100 orders per day during the second half.

Due to employee turnover - 20% during the first half of the quarter and 40% during the second half - new employees are hired to immediately replace those who leave. These new employees work at approximately 63% efficiency compared to experienced workers, as the remainder of their time is spent on training, which lasts 15 days, after which they become fully experienced.

The objective of the model is to forecast whether the management’s production target of 32,500 man-hours can be achieved under these conditions.

Model Components Description:

1. Stocks (Resources)

· New Employees – numer of newly hired workers;

· Experienced Employees – numer of experienced workers;

· Workload – amount of work thats needs to be completed;

· Work done – amount of completed work.

2. Flows

· Hiring – hiring of new employees;

· Training – training of new employees;

· Exiting – rate of employee departure;

· Orders Work – inflow of work from new orders;

· Work – work being done.

3. Variables

· Training time – training duration

· Time – days

· Incoming orders – quantity of new orders

The diagram below shows the model created in Vensim software.

Below are the key equations describing the relationships in the model:

1. Exiting

=IF THEN ELSE( Time<=30 , (Experienced Employees*0.2)/20 , (Experienced Employees*0.4)/20 )

2. Work

=8*Experienced Employees+5*New Employees

3. Training

=New Employees/Training Time

4. Incoming Orders

=IF THEN ELSE( Time<30 , 50 , 100)

3. Model simulation and presentation of charts

After building the model and describing the relationships, the simulation was run. Upon running the simulation, the charts below showing the variables’ dependencies over time were generated.

4. Conclusions

On the chart showing the number of new employees, a gradual increase in hiring can be observed up to day 30. After day 30, the hiring rate accelerates due to a higher turnover of employees, which is reflected in the chart presenting the number of experienced employees.

The Workload chart illustrates how the amount of work to be done changes on each day of the simulation. A downward trend can be observed on this chart. The Work Done chart shows the amount of work completed and exhibits a linear upward trend. It can be seen that employee turnover does not have a significant impact on the amount of work completed.

On the last day of the quarter, the total amount of work that the production team can generate is 32,835 man-hours, which indicates that the team is capable of meeting the established target. Potential problems in achieving the goal could arise if unforeseen absences occur. The company should consider the possibility of hiring additional workers.