Cutting Employee Turnover
Research consistently reveals that employers grossly underestimate their cost of turnover. Cash costs across the board range from 25% of compensation to over 250% for certain high tech positions. The additional hidden costs include lowered employee morale, diminished customer confidence, lost opportunities and wasted staff and management time.
Employees join companies but they leave managers. Top managers recruit talent, manage to employee strengths and work continuously to align organizational tasks with employee talents. Compensation must be paid ‘to market’ but beyond that, employee satisfaction determines retention. And employee satisfaction depends on job match more than any other factor according to an historic study by Herbert M. Greenberg published in the Harvard Business Review.
Cutting turnover begins with your selection systems. Positions must be profiled to determine the criteria required of the ideal candidate. HR then recruits to this profile. Job match of existing employees is assessed and managers are taught how to align individual talents with organizational roles.
The dollar investment for these processes depends on the number of employees and the number of open positions. Quantity discounts are available but in all cases the investments are insignificant compared to the costs of turnover.
The potential ROI is almost always extremely attractive because potential savings are huge and required investments are small.