Your business incurs expenses, both direct and indirect that any time an employee leaves your team. It costs employers 33 percent of an employee’s annual salary to hire and train a replacement, according to Employee Benefit News (EBN). Although obvious costs, such as relocation fees, can be easy to measure, it is also easy to overlook hidden or ongoing costs that arise during employee turnover. Here are five often-overlooked ways that employee turnover hurts your bottom line and how to combat them.
It takes time to recruit for a replacement: Each hour spent finding a replacement and training a new employee is time not spent building relationships with employees or enhancing the experience and processes of your employees. Think of the potential missed instead of just remembering the time invested.
The learning curve for new employees can decrease productivity: Even the best new hires take time to learn the processes and develop the relationships needed to most effectively do their jobs. If your company has low employee retention, lower productivity can add up to a significant amount of time.
Recruiting and outsourcing fees: Although these charges are easy to calculate, high employee turnover will easily add up. A Human Resources study from 2016 found that bringing in a new employee costs $4,129 on average. In addition, job seekers who continuously see a business recruiting for the same roles can reconsider wanting to work for the employer.
Turnover negatively impacts your customers: When the staff leave, consumers note. They may also pursue another company to a favorite salesperson. It weakens customer relationships with your company and time an employee leaves. What’s more, during the vacancy or transition, client needs and responses can go unanswered.
Training comes with a cost: It costs money for both formal and informal preparation. Since your business recognizes that supplying workers with top quality training is essential to your success, you concentrate on rapidly training new employees. However, not only do you lose the time and resources spent preparing them as workers leave, but the business must spend more money on training the next new employee.
To develop your business, investing in and retaining staff is crucial. If you fail to provide workers with the resources and opportunities to expand, they will probably leave your business for another. Your business can save money, time and even your image in the marketplace by concentrating on an employee retention program. But how can you really increase the retention of employees? Here are three tactics for your corporation to adopt it.
Create a career path for each employee – Employees want to learn inside the business what potential prospects are open and how to step up in the organization. Employees know what is expected of them and what they need to do to step up, by developing a customized roadmap for each employee with clear objectives and achievements to become ready for the next stage.
Proactively provide training and learning opportunities – Employees often need training in both technological skills and soft skills in order to be able to manage expanded responsibility. You can have a wide variety of courses as well as organized informal learning opportunities using a learning management system.
Design a formal mentoring program – Employees develop both expertise and links to the business by developing partnerships with more experienced team members. Based on talents, personality and career paths, be sure to carefully align mentors with younger employees. Provide both mentors with instruction to help them proactively coach their mentees and direct them.
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