How to avoid costly employee turnover and keep your small business team on board
Have you ever considered just how much employee turnover costs your small business? While exact figures are hard to pin down, Zane Benefits, online health solutions provider, suggests that the cost for a business to replace a salaried employee can be anywhere from six to nine months’ salary on average. That figure may vary depending on the employee’s wage and position. For example, losing a high-earning or executive-level employee can cost a business as much as twice the individual’s annual salary, whereas it might only take 16 percent of salary to replace a low-wage earner position.
Costs associated with turnover include advertising the position and having someone take time to review resumes or securing the services of a recruitment agency. You also may need to hire temporary staff to fill the position during the vacancy. In addition, there are costs related to:
Lost productivity: It can take a new person months or even several years to reach the productivity of the person who left. Plus there’s the cost of the lost knowledge and the skills of the individual who leaves the position.
On-boarding: It takes time for a new employee to get up to speed on HR policies, benefits and company rules about confidentiality, intellectual property, etc. Your IT department or manager also has to spend time going over data security issues, which these days may include your company’s Bring Your Own Device (BYOD) policy regarding the use of personal mobile devices and apps.
Training: Training time includes a new employee learning the new job as well as the technology that you use to operate your business. For example, if you have a unified communications (UC) system, new employees will have to learn how to use its various features.
Lost business: You may lose customers when an employee leaves. Some customers are bonded to your company because of one particular employee. Customers may look elsewhere, especially if they are not satisfied with the new person assigned to handle their business.
The Fix: Keep employees engaged and enthusiastic
Considering the high cost of losing employees, provide a work environment that makes employees want to stay and commit to your company’s success. Today’s employees want flexibility and to meet that need small business owners are offering more flexible, remote and mobile work options, the recent Plantronics Workplace Flexibility Survey found.
Employees also are more committed to working for companies that, in addition to providing competitive salaries and benefits:
- Promote from within
- Make them feel valued
- Have open communication
- Show a commitment to their future through ongoing training and development
- Clearly convey expectations
- Provide rewards and incentives – bonuses or even perks, like money toward health club memberships or lunch on Fridays
- Challenge them
What else would you add to this list?