Updated: Jun 4, 2022
It’s hard to find and retain the best employees, but absolutely vital to a business. Doing so as a smaller business is even more challenging, as they are competing with bigger businesses and bigger budgets for the same talent. But a higher salary isn’t the only way to compete with your competitors in the job market.
The cost of employee turnover doesn’t only directly affect the bottom line. Data shows that turnover lowers morale and decreases productivity. While low morale is difficult to quantify into actual dollars lost, it has a significant impact. And decreased productivity as a result of turnover might be difficult to map out, but it is simple to see the path from A to B.
The biggest and most visible impact with employee turnover is the financial impact. Recruiting and training replacement costs may vary from company to company, but there is no question that it is not cheap. Some studies even say that replacing a $60k salaried position can cost 6 to 9 months' salary on average. So that’s $30k to $45k just spent on the replacement.
Actual costs are tough to calculate but think about these factors: Recruiting costs, onboarding costs lost productivity, lost engagement, service errors, training costs, and the cultural impact somebody leaving has on the remaining staff. Most organizations do not have any systems in place to track the data on exit costs, or hiring costs like recruiting, interviewing, hiring, training, administrative cost, etc.
While tracking these costs can be tricky to set up and implement, it is easily worth it overall. The more data, the better.
Strong retention strategies are important and why you must stand out as an attractive place to work. Traditional recruiting may find you somebody that fits into that vacancy, but in today’s job market, finding the best employees is taking a new approach. Thinking outside the box when it comes to attracting talent is the future of hiring. Companies have begun applying sales funnel techniques to the process. Standing out from the crowd, showing potential candidates that your company goes the extra mile in attracting great talent.
When you do decide to step into these new ways of attracting great talent, are you ready to keep them around long-term? The future of not only attracting but keeping great talent is changing. Don’t get left behind.
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