Employee Turnover. VERY COSTLY—but there’s a SOLUTION!
Man, it hurts to lose a good employee, a good teammate . On rare occasions, sometimes it’s not so bad to see certain co-workers take a hike, but for the most part, it can be disruptive, hurtful, confusing and, most of all, expensive. It is hard to quantify the cost of employee turnover, but the Society of Human Resource Management takes a shot at it. Here is what SHRM says about the cost of losing an employee:
Every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average.
“Six to nine months of salary on average.”
Let’s do the math on those numbers. Let’s say you have a salaried, mid-manager making $60,000.00 a year. You lose her. She was making $5K per month. The cost of replacing her, if you CAN replace her, is 9 months. That’s $45.000.00 going out the window for someone that is not even present in the building.
That number reflects the hidden costs of recruiting as well as new training for the replacement, placing the new hire into the company’s LMS, learning management system, and the time it takes for the new hire to ramp up to the level of her predecessor’s performance. Seems like it would make a lot of sense to try like the devil to lose as few people as possible.
Seems like companies would look long and hard into solutions for losing key people. If you’ve read The Dream Manager by Matthew Kelly you read about a myriad of ways to reach out to your team to find out what the critical issues are that keep them engaged. I would strongly encourage you to read Mr. Kelly’s book if you manage or own a business.
Why do people change jobs?
According to the Harvard Business Review here are the main reasons:
- They don’t feel valued
- They don’t see the organization as a place to succeed
- They feel overworked
- They feel that their opinions are without value—that they won’t be heard
- They do not feel appreciated
- They feel they are treated unfairly compared to others
- Their work lacks purpose
- They don’t see a career path
- They have lost faith in the leadership
Most of these people have been at the job for 5 years or more. How is it that they were lost?
Each one of the reasons above fall into one category—INTERNAL CUSTOMER SERVICE! Each one of the reasons for employee loss are remedied with caring and communication. When we realize that people are our greatest assets, that’s when management will find out about these issues BEFORE they happen. Tell someone how well they’ve done, and they’ll feel valued . Tell someone where they can go in their job and they’ll be motivated. Listen to someone, excuse me, ASK someone if they feel overworked. Ask an employee their opinions about things and you will make them feel appreciated and important. Ask them if they understand the importance of what they are doing—and if they don’t tell them.
It’s called Internal Customer Service.
It’s also called employee RETENTION.