Now more than ever, it is increasingly important for companies to know how to retain top talent in order to have a competitive advantage.
Have you had someone leave who you wish had stayed? Did they take their knowledge, experience and can-do attitude with them?
The cost of losing an employee varies based on how much they earn. In a study conducted by the Center for America Progress, the cost of losing an employee can be anywhere from 16% of their salary for hourly, nonsalaried employees (approximately $3,300), to 213% of the salary for a highly trained position!
So if a high trained executive is making $120,000 a year, the true loss could be up to $255,600 to the company!
What causes the cost to be so high? Consider these:
- Cost of training and on-boarding: New hires can trained in external seminars and classes or by people within the company. Either method creates a situation of overworking other employees to make up for the people conducting the training.
- Advertising and recruiting costs: Posting on job boards costs money. Using a recruiter will often cost 25-33% of 1 year’s salary for higher level people.
- Interviewing costs: time spent interviewing reduces productivity. If the applicant needs to travel for the interview – even greater cost.
- Lower engagement and productivity of those left behind: people become distraught when their co-workers or friends leave. They worry that the company might be in trouble.
- Productivity of new hires. It will take weeks and as long as 2 full years to reach the same productivity of an existing staff member.
- Impact on morale and the gossip machine: people will leave get a greater increase in their salary. They may talk to other employees about the great opportunities at another company.
- Less effective service: a new hire must learn the needs and particular request of customers and clients. They may be slow enough to become effective that customers might find another provider.
What you can do:
1. Create a stimulating work environment. Everyone wants to to feel they are contributing to the company’s success.
2. Millennials especially are more civic-minded: they have a strong sense of both local and global community. Help them connect and make their contribution.
3. Create and maintain a company culture of collaboration and skill building. The kind of culture that holds onto talented people.
Many of the Top 100 Best companies to Work For listed in Fortune Magazine agree that it is not the perks, benefits, programs and practices that make people want to work for them. It is building high-quality relationship in the workplace. Their associates are motivated by the respect of their peers.
The success of your company starts with your people. It’s their experience there that keeps them committed and loyal. As a service provider or product manufacturer you can build the kind of culture that holds onto the talented people you need to compete in today’s marketplace.
Once you make sure your workforce is skilled, you must know how to keep them committed. There are many layers to the retention challenge. A great culture do a lot to meet that challenge.
Let’s have a complementary Discovery Session, and start talking about where we can take your company.
Click here to learn more about creating a great culture and keeping your talented people.