For businesses to thrive in today’s economy, finding and retaining the best employees is important. This is especially true for small businesses and nonprofits competing with larger businesses, and larger budgets, for top talent.
In a recent article on employee retention, Josh Bersin of Bersin by Deloitte outlined factors a business should consider in calculating the "real" cost of losing an employee. These factors include:
The cost of hiring a new employee including the advertising, interviewing, screening, and hiring.
Cost of on-boarding a new person including training and management time.
Lost productivity... it may take a new employee 1-2 years to reach the productivity of an existing person.
Lost engagement... other employees who see high turnover tend to disengage and lose productivity.
Customer service and errors, for example new employees take longer and are often less adept at solving problems.
Training cost. For example, over 2-3 years a business likely invests 10-20% of an employee's salary or more in training
Cultural impact... Whenever someone leaves others take time to ask "why?"
One of the reasons the real cost of employee turnover is an unknown, is most companies don't have systems in place to track exit costs, recruiting, interviewing, hiring, orientation and training, lost productivity, potential customer dissatisfaction, reduced or lost business, administrative costs, lost expertise, etc.
So, what can you do about employee retention?. Some of these employee retention tips include: