Employee turnover costs organizations billions of dollars yearly. An SHRM study found that companies will need to spend six to nine months of an employee’s salary to recruit, find, train, and prepare a replacement. The Center for American Progress concluded that across jobs, from non-specialized to high-skill specific positions, the cost of replacement is between 10 and 30% of the employee’s annual salary.
Considering 1/5 of the population leave their jobs voluntarily, while another 1/6 are released, we’re talking billions of dollars annually. But why?
Everything from recruitment costs to dealing with the wake of a bad hire cost employers millions of dollars.
Recruiterbox has a nice graphic to breakdown the costs of recruiting and hiring employees as well as the costs of a bad hire.
So what can an organization do to stop the hemorrhaging?
1. Retention begins before the hiring process with clear, concise job descriptions. This job description is a blueprint for what work a new hire will need to do. Take time to consider the position and think about the goals of each position and skills each new hire will need. Somebody creative who can’t manage a Power Point presentation can stop an entire process that will frustrate not only the new hire, but also her co-workers and employers.
2. A strategic onboarding program will help the new hire transition to become a productive employee more quickly and efficiently. This is not orientation – the nuts and bolts of the business we all need. Instead, it’s individualized, goal-oriented, and has an evaluation process to keep it strong, updated, and relevant.
3. Setting short, medium, and long-term goals are the name of the game. Set your employees up for success with bench-marked goals you can track in real-time. Goal-oriented work can help keep new hires on track and understanding their purpose in the organization.
4. Create a strong mentoring program: Statistics reveal that a strong mentoring program will drop employee desertion. A Slate.com article compares Fortune 500 companies from which we can take two extremes: Amazon and Google. The former can barely keep people in the door, whereas Google is lauded for being the best company to work for in America. This has to do, in large part, with a stellar mentoring program.
5. Let your employees grow with the organization by providing educational opportunities, training programs and more. The more your employees have a chance to develop and hone their skills, the happier they will be! Personal and professional growth are critical to employee engagement.
You can stop the bleeding. But retaining new hires and veteran employees takes a company-wide strategy. It doesn’t happen by chance.