How to Retain Employees
How to retain employees: a high turnover rate is costly in both direct and indirect costs.
By Shehan, Tom
Publication: Detroiter
Date: Saturday, January 1 2005
You are viewing page 1
Many owners of businesses with high employee turnover find themselves running in place instead of growing their companies. As the economy improves, more employers are facing this issue because employees are shopping around their resumes in hopes of landing better positions. In fact, 83 percent of employees surveyed by the Society for Human Resource Management said they are dissatisfied with their current positions and are seeking new employment
.
High turnover affects companies in several ways. First, when long-time employees leave, they often take valuable institutional knowledge or intellectual assets with them. Seasoned staff members serve as morale boosters for work teams and help new employees progress more quickly. Having to replace these assets costs employers a lot in both time and money.
Second, high employee turnover often forces business owners to focus their own efforts on staffing. Whether the employees being replaced are senior-level executives, middle managers or entry-level staffers, business owners often bear the responsibility of recruiting, interviewing and training new hires. And this is at a great cost--typically the equivalent of 30 percent to 150 percent of the salary for the position.
Furthermore, many business owners mistakenly believe that the cost of replacing employees is merely the price of newspaper or Website advertisements. However, both direct and indirect costs must be taken into consideration.
For example, employers may need to hire a search firm or a headhunter to find the right candidates for hard-to-fill positions. An often-overlooked indirect cost of turnover is its effect on other staff members. While a position remains vacant, other employees usually take on additional responsibilities. Without proper implementation and
By Shehan, Tom
Publication: Detroiter
Date: Saturday, January 1 2005
You are viewing page 1
Many owners of businesses with high employee turnover find themselves running in place instead of growing their companies. As the economy improves, more employers are facing this issue because employees are shopping around their resumes in hopes of landing better positions. In fact, 83 percent of employees surveyed by the Society for Human Resource Management said they are dissatisfied with their current positions and are seeking new employment
.
High turnover affects companies in several ways. First, when long-time employees leave, they often take valuable institutional knowledge or intellectual assets with them. Seasoned staff members serve as morale boosters for work teams and help new employees progress more quickly. Having to replace these assets costs employers a lot in both time and money.
Second, high employee turnover often forces business owners to focus their own efforts on staffing. Whether the employees being replaced are senior-level executives, middle managers or entry-level staffers, business owners often bear the responsibility of recruiting, interviewing and training new hires. And this is at a great cost--typically the equivalent of 30 percent to 150 percent of the salary for the position.
Furthermore, many business owners mistakenly believe that the cost of replacing employees is merely the price of newspaper or Website advertisements. However, both direct and indirect costs must be taken into consideration.
For example, employers may need to hire a search firm or a headhunter to find the right candidates for hard-to-fill positions. An often-overlooked indirect cost of turnover is its effect on other staff members. While a position remains vacant, other employees usually take on additional responsibilities. Without proper implementation and