Needs Assessment – Department Reorganization

Challenge

Asset Verification Company (AVC) is a global provider of audit verification and inspection services, primarily serving the financial services sector. Founded in 1991, AVC has grown to generate nearly $40 million in annual revenue, employing approximately 200 salaried staff and managing a network of around 1,000 independent contractor inspectors in North America. AVC specializes in floorplan financing, offering property, equipment, and auto inspection services to financial institutions that lend to dealers and dealer networks.

Performance Gap

AVC faces a significant challenge with inspector attrition, particularly among newly onboarded inspectors. While Phase 1 attrition (during recruiting and onboarding) has been reduced from 60.8% to 42.7%, Phase 2 attrition (post-release, after onboarding) remains high at 37% within the first 180 days. This attrition rate is problematic as AVC aims to grow its inspector force by 50% in 2024, from 1,000 to 1,500 inspectors, to meet projected revenue growth. The high turnover not only increases recruitment costs (approximately $100 per inspector) but also threatens AVC’s ability to meet client demands and achieve its revenue goals.

Inspector Workflow Swim Lane Chart

Why Address the Gap?

Reducing inspector attrition is critical for AVC’s growth and profitability. The cost of onboarding new inspectors is just the tip of the iceberg; the real cost lies in lost revenue opportunities due to insufficient inspector capacity. Without enough inspectors, AVC risks losing clients and failing to meet its ambitious revenue targets. Additionally, high attrition strains recruitment efforts and increases operational costs. Addressing this issue is essential to ensure AVC’s competitiveness and long-term success in a growing market.

Methods

To identify the root causes of inspector attrition and recommend solutions, the team employed a structured needs assessment process, utilizing several established models and frameworks:

  1. Harless’ Front-End Analysis (FEA): Used to validate the existence of a performance problem and identify key questions to guide the assessment.
  2. Chevalier’s Updated Behavioral Engineering Model (BEM): Applied to analyze environmental and individual factors contributing to attrition.
  3. Rummler-Brache’s Nine Box Model: Used to examine organizational, process, and performer-level factors affecting inspector performance and retention.
  4. Hale’s Families of Interventions: Assisted in categorizing and prioritizing potential solutions.

Data collection methods included:

  • Interviews: Conducted with key stakeholders, including the Director of Field Services (DFS), Regional Managers, and active inspectors.
  • Extant Data Analysis: Reviewed inspector inactivation reports, attrition surveys, and audit process diagrams.
  • Surveys: Analyzed responses from inactivated inspectors to understand their reasons for leaving.

Causes

The analysis identified several key causes of inspector attrition, categorized into environmental and individual factors:

Environmental

  1. Compensation and Travel Pay: Inspectors perceive pay as insufficient, and travel stipends are often inadequate to cover expenses. Compensation is largely dictated by client contracts, limiting AVC’s ability to adjust pay rates.
  2. Lack of Early Work: New inspectors often receive fewer job offers due to CSA bias, where experienced inspectors are prioritized. This lack of early work discourages new inspectors from staying.
  3. Inadequate Business Support: Many inspectors, particularly retirees, lack experience running their own businesses. AVC provides little guidance on essential skills like bidding, bundling, and managing finances.
  4. Poor Communication: Inspectors report inconsistent communication with CSAs and Regional Managers, leading to frustration and disengagement.

Individual Causes

  1. Lack of Knowledge and Skills: New inspectors often lack the skills to effectively bid on jobs or bundle inspections geographically, reducing their earning potential.
  2. Motivation and Hustle: While some inspectors possess the intrinsic motivation to succeed, others struggle with the demanding nature of the job, which requires long hours and extensive travel.
  3. Misaligned Expectations: Many inspectors join AVC without fully understanding the independent contractor model or the challenges of the role, leading to early disillusionment.

Recommended Solutions

Based on the identified causes, the following interventions are recommended to reduce inspector attrition:

  1. Reframe Compensation: Educate inspectors on how to maximize earnings through effective bidding and bundling, rather than focusing solely on base pay rates.
  2. Redefine the Inspector Role: Provide clear guidance on the independent contractor model, including resources on managing taxes, expenses, and other business-related tasks.
  3. Process Documentation: Develop job aids and training materials to help inspectors understand the inspection process, including bidding, bundling, and scheduling.
  4. Standardize Experience Levels: Implement competency gates and badging systems to recognize inspector expertise and provide access to higher-paying jobs.
  5. Rate and Reward Performance: Introduce a star-rating system to incentivize quality performance and provide feedback to inspectors.
  6. Develop an Inspector Extranet: Create a centralized platform (e.g., using SharePoint) to house resources, training materials, and communication tools for inspectors.
  7. Business Skills Training: Offer professional development courses on topics like financial management, record-keeping, and using productivity tools.
  8. Align Expectations: Conduct periodic surveys to gather inspector feedback and identify areas for improvement.

References

Chevalier, R. (2008). *The evolution of a performance analysis job aid.* Performance Improvement, 47(10), 9-18.

Hale, J. (2006). *The Performance Consultant’s Fieldbook: Tools and Techniques for Improving Organizations and People.* John Wiley & Sons.

Harless, J. (1987). *An analysis of front-end analysis.* Performance + Instruction/Performance & Instruction, 26(2), 7-9.

Rummler, G. A., & Brache, A. P. (1995). *Improving Performance: How to Manage the White Space on the Organization Chart.* Jossey-Bass.

Stefaniak, J. E. (2020). *Needs Assessment for Learning and Performance: Theory, Process, and Practice.* Routledge.

Appendices

Appendix A: Code Book and Data

  • Includes a detailed breakdown of performance variables, codes, and definitions used in the analysis.
  • Summarizes inspector inactivation data, including reasons for leaving and job performance metrics.

 Appendix B: Tools and Instruments

  • Contains visual representations of the models used, including Chevalier’s Updated BEM, Hale’s Families of Interventions, and Rummler-Brache’s Nine Box Model.
  • Provides a description of Harless’ Front-End Analysis (FEA) and its application in the needs assessment.

Appendix C: Interview Scripts and Informed Consents

  • Includes interview questions for active inspectors and Regional Managers, as well as consent forms for participation.

 Appendix D: Needs Assessment Planning Table

  • Outlines the key questions, data sources, and analysis methods used in each phase of the needs assessment.

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