Expensive Turnover – Take These Steps
Depending on which article you read, turnover can cost your company as much as 4 times the annual salary of the employee. (Click here and search for yourself)
Remember all the steps and all the people who get involved in replacing a termination, whether voluntary or not.
- Exit interview
- Lost revenue/sales
- Lost clients
- Team’s morale
- Employment advertising
- Employment agency
- Interviews (5 is not uncommon)
- Background checks
- Reference checks
- Drug testing
- Salary/benefit negotiations
- Team blending
- Training (6 months is not uncommon)
- Lost productivity
- Administrative activities (during the entire process)
The list can get crazy long quickly depending on the position being filled. And the cost, well the cost is almost exponential as you most up the corporate ladder. Even the most conservative dollar figures are high.
- $12,000 for an entry level employee
- $24,000 for a mid-level team member
- $36,000 for upper management
These number can add up to significant dollars over the course of a year.
Doing a little math will easily demonstrate what the potential costs are to your company.
You don’t need to start planning price increases for your products or services to cover the costs of turnover just yet. A good first step would be to find ways to reduce your turnover.
The obvious first step to reduce turnover would be to hire the right people. Sure, there will always be exceptions to every situation. You can hire the right person and their wife gets transferred out of state, or a family emergency forces and extended leave that turns into a permeant leave. But you cannot run or plan the success of your business on the exception, you run and plan based on normal and deal with the exceptions as they arise.
Before you hire check out the candidate. Background search, Facebook, Twitter see what you can find out before you hire. It is well worth the effort. Don’t do it for every candidate, only your top three.
The worst mistake you can make is assume your new hire knows the job. They may know the tasks or the results you are looking for, but do they know how you want your clients treated? Do they know how to fill out your company’s paperwork? Like the old saying, “There is more than one way to skin a cat.” You are any number of ways to get a specific task done. Your training needs to make sure your new hire is “skinning the cat” exactly how you want it skinned.
Most jobs today require tools of some kind, whether they be laptops or pressure gauges the better the tools are the better or faster the job can get done. One sure way to frustrate any employee, but particularly a new one, is by providing them with old, broken tools.
If it is going to cost you several thousand dollars to replace the employee and several hundred to replace the tools, which is smarter?
Think about how you feel when you walk into a restroom that smells, or has paper all over the floor and the sink counter is wet. Not a good feeling, right? Your perception of the business is diminished. The condition of the restroom will likely influence your next visit.
Your team feels the same way when they walk into your office bathroom and it’s a mess. They wonder if you care. They wonder about the company’s future.
Make your restrooms as nice as you can afford to make them. Keep them spotlessly clean. Keep them smelling clean. In addition to keeping your employees happy, clean restrooms will impress your clients.
Salaries are normally one of the highest single line items on a budget. It is vital your employees have everything they need to complete their jobs. Do they have to wait for a slow internet connection? Do they have to wait for the restroom? Do they have to wait for anything? The answer is most likely, yes. In most companies waiting is the biggest productivity killer of all.
Ergonomic furniture and workplace choices can have a big effect on employee productivity. If you’re getting occupant complaints about workstations but are concerned about purchasing costs, consider some easy changes that can have big results. Adjusting the angles on employee chairs can greatly decrease the amount of sore back complaints – aim for a reclining posture of 100 to 110 degrees. Additionally, keyboards should be placed directly in front of occupants to reduce arm strain. Placing a stand under computer monitors can enhance employees’ ability to utilize their equipment and keep the screen at a safe distance (18 to 30 inches) that’s not hard on the eyes or neck. Read more about the benefits of comfort.
Facility managers are always looking to cut costs, but a small investment in foliage has been shown to have big benefits. Research demonstrates that workers in facilities that decorative with office plants tend to perceive indoor air quality as higher, report increased satisfaction and concentration levels, and increase their productivity up to 15%. If you’re considering adding greenery to your office space, artificial plants can be a smart option that benefits occupants without adding to your building’s carbon footprint. Read more about the benefits of plants.
The most common salary increase is about 4 percent. The most common salary increase when changing companies is 20 percent. If you want to keep your people stay updated on market wages and don’t be so stingy.