The revolving door of turnover isn’t going to slow itself and yet many executive teams still aren’t giving their HR departments the appropriate resources needed to effectively combat the issue. If your organization is serious about improving employee retention, more intentional spending is needed on the front-end of building today’s new employer-employee relationships in order to avoid the costly turnover costs on the back-end as new hires continue to walk away. Let’s face it…the money is coming directly from your bottom line, either way, so you might as well spend it in ways that improve the organization, its leaders, and its culture.
Where to Put Your Dollars
As you plan for next year and make your case to receive more dollars or other resources for your HR (or People & Culture) team, here are some things that are now essential to reducing turnover:
1. Proven Diagnostic Tools Do you REALLY know why people leave or are you assuming it’s because of pay and schedules? It’s not! So if you aren’t collecting QUARTERLY data to measure employee engagement and learn exactly why people stay and go, it’s time to get a new employee survey tool! Annual surveys are no longer effective, and who measures business metrics once a year? No one! Be sure you’re spending money on data you can actually use to make the right changes within your organization.
2. Management Training Don’t have a supervisor/management training program for folks who get promoted into those roles? You need one! Have an outdated program that’s not getting great reviews? It’s time to upgrade! Whether you build and teach it in-house or bring in external experts for leadership development, management training MUST HAPPEN today. Not only do your employees deserve (and demand) better bosses, but many supervisors and managers won’t be happy (and won’t stay) in those jobs if they don’t know how to be effective in their roles. Identify whether you need a basic training program, more advanced classes, or something even more specific like our 8-part Workforce Retention Bootcamp.
3. Management Development Resources Managers need continuous access and opportunities to develop their communication and other leadership skills in order to evolve with the shifting workforce. Have you offered assessment tools for understanding the behaviors and motivators of themselves and their staff? It reduces conflict, improves relationships, and enhances productivity. And do you have a business library of leadership books they can access at any time? If not, get one started! And if you do, be sure to buy copies of Staying Power: Why Your Employees Leave & How to Keep Them Longer to keep in stock. Want a bulk order, contact us for discounts.
4. Systems & Software Are you using a GOOD applicant tracking system (ATS), GOOD scheduling software, and GOOD in-house systems that don’t crash? Having good HR systems in place will make your hiring process faster and more effective. Scheduling software puts the control in your employees’ court, which they love. And keep in mind that all staff hate slow systems of any kind in today’s fast-paced world, so be sure to budget for system updates and equipment upgrades annually!
The Real Cost of Employee Turnover
Need numbers to make your case? We’ve worked with national researchers to validate that it often costs $5,000-$10,000 per employee lost in front-line positions. If that person knows what they are doing in their role and can work independently, it is very time-consuming and costly to find, hire, onboard, train, and mentor a person back up to that same level of productivity. Not to mention any overtime premiums being paid out due to the vacancy. If you’re looking at roles within an office or management-level employees, we can easily calculate a $15,000-$25,000 loss. And if you lose a subject matter expert, technical advisor, regulatory guru, etc., we’ve calculated well over $100,000 to replace those key people in some cases.
So How Much Do I Budget for Next Year?
The suggested programs and resources above are typically priced based on the number of employees and/or managers a company has. If you’re working on next year’s budget RIGHT NOW, contact us for quick-turnaround ball-park figures or an official proposal to review with your executive team. Don’t let turnover chip away at your profitability. We can fix it together! Workforce thought leader and keynote speaker, Cara Silletto, MBA, works with clients to reduce unnecessary employee turnover by bridging generational gaps and making leaders more effective in their roles. She was named a “Game Changer” by Workforce Magazine and is the author of the book, “Staying Power: Why Your Employees Leave & How to Keep Them Longer.”Reach Cara directly at [email protected].