You need the most talented to power your company. And you want to keep those employees as long as you can. You need to offer all the right perks and benefits and find people who fit into your company’s culture and will stay committed to the cause. If you can’t retain your employees and you keep losing them to your competition, finding and hiring those replacement can cost your company a lot of money. Here’s how much turnover is costing your company.
Departing employees kill morale
It can cause quite the stir when someone leaves your company—everyone else suddenly becomes desperate to find out what happened. They get nosy and start to wonder whether they’re happy or whether they should leave too. It kills focus and productivity! And sometimes, it even causes a domino effect of departures. Unhappiness can become contagious, so be proactive and squash discontent! And if the position sits vacant for too long, your other employees will be burdened trying to cover those extra duties. Eventually, this will get old and cause further unhappiness.
Hiring is a pricey process
Some studies suggest that each time a company has to replace an employee, it can cost an average of anywhere from 6 to 9 months’ salary. And it might be as much as twice the annual salary for an executive. But there are also a lot of intangible costs—advertising, interviewing, and screening costs that are different for every company—but they add up. Then there’s the cost of training a new employee. A company is likely to spend 10 to 20 percent of an employee’s annual salary in training over the first two to three years.
New employees lose momentum
First it takes time to advertise, interview, screen, and hire. Some companies like to do several rounds of interviews, just to be sure about a candidate. Great, but all that time adds up. And during that whole process, your company is understaffed, which means your productivity is suffering. Next it takes time to train the new employee, and it can take several years before they fully understand their role to be successful in it.
Keep your employees loyal
If you can keep your employees happy so that they’re loyal to your organization, you won’t have to be faced with these costs again and again. When people leave, conduct exit interviews so you can figure out why people are unhappy working there. Then respond to those trending causes. If good workers are leaving because the pay isn’t sufficient or there’s not enough professional development, do your best to up those perks. Make sure your benefits package can compete with other companies in your industry. And finally, create an environment where you can regularly check in with employees and hear feedback from them. When you sense dissatisfaction, find the root cause and do something about it.
For more information on how to make sure your job search goes as well as possible, check out our website at https://www.chiefofstaffkc.com/employers/.
Blog written by Erin Greenhalgh