It’s more than you think. When an employee’s business relationship isn’t working out, they become sick or they need to take an extended leave, businesses pay for it, in more ways than one. So it’s in a business’ best interest to do whatever they can to keep and support the best people in their organization. Let’s explore the employee cost losses in detail and then learn how you might stop it from happening.
What are the costs and where do they come from?
- Lower productivity of the person who is leaving
- Reduced quality and/or lower productivity of employees who have to take on more work when someone leaves
- More mistakes happen in the first three to six months when a new employee starts a job
Administrative and training costs:
- More administrative tasks when a person is leaving an organization
- Time and money spent on advertising a new position
- Interviewing people
- Reference checks
- On the job training
Total costs in dollars:
Some HR professionals estimate that the cost of losing an employee can be 25 percent of the employee’s annual salary plus benefits.
How can you make sure it happens less often in your organization?
1. According to a Grow by Joe video, one of the top items in his list to keep employees is to create a culture. “Having an amazing culture in your workplace is a game changer.” It helps to attractive, motivate and keep employees. When staff can come to a workplace where they look forward to coming to work every day, you’re on the right track.
2. Trust employees. Trust your employees to do their work and to try different things. Even if they fail, it likely won’t take your organization down and sometimes employees can do things better than everyone imagined. Employees need to trust managers too. They need to trust that managers are keeping them informed and that their manager’s word is something they can count on. They want managers who are transparent and open.
3. Give employees the opportunity to grow: Whether that’s moving to a new position or new role or just developing their personal skills. Help them to grow within their current position, or in the organization as a whole.
4. Reward and recognize your employees: People appreciate even a simple note that says, “Great job.” It goes a long way and they’re more likely to work harder for you if they know they are appreciated.
5. Check in with your employees more than once a year and let them know how they’re doing in their work. Staff want to know how they’re doing regularly. They like it.
6. Hear and respect your employees. Meet and listen to your employees. It’s the only way to make your business better.