Competition is fierce in today’s job market. Businesses are constantly struggling to attract, recruit, hire and retain the best employees-and their competitors are doing the exact same thing. Getting the best workers to join your team is only half of the battle. Keeping them with you is the other half. Losing employees-especially good ones-costs companies a considerable amount of money in lost productivity, headhunting, recruitment, and hiring.
The nightmare all hr consulting firms have is to come into work and find out they have to find a replacement for a high-level employee who is moving on. Finding suitable applicants for these positions is difficult, and time is of the essence when it comes to getting the position filled.
For this reason, companies work hard to keep their best employees happy and well compensated. They offer performance bonuses and opportunities for growth and advancement. All of this is necessary to ensure that your MVPs don’t switch teams because they receive better offers from your competitors.
Employee Turnover Cost
Losing employees and hiring new ones affects a business in several ways-and hits them in the wallet, where it hurts. It is estimated that the departure of an employee can cost a company up to 150% of the annual salary for the position-and up to 250% for managers or salesman. Costs involved include work that does not get done, finding temporary help to fill the gap, recruiting and hiring costs, and training costs for a replacement.
Customer Service Problems
In industries where employees develop close relationships with clients or customers, losing employees can mean losing business along with them. Customers are often particular about who they work with, and often take their business elsewhere when changes like this are made. Sometimes they even follow the employee, as they have already established a good working relationship.
Employees, especially those who are with the company for extended periods of time, develop special knowledge about the company that is not in the training manuals. This is often called sticky knowledge, and only comes with experience. It is very difficult to impart to replacements, so when an experienced employee leaves, the knowledge leaves with him. It will take years for a new employee to gather such an understanding of the company, the industry, and how things really work, making employee retention especially important.
When one employee leaves, other are typically asked to pick up the slack in the interim period. This means increased workloads for everyone, and often results in a decrease in overall productivity. The longer it takes to fill the position, the larger the effect on the hr consulting firms and its remaining employees. This scenario is far from ideal, as employees are often left working outside of their area of expertise, and several problems could arise as a result. In addition, the extra stress on employees may lead to more resignations.
These reasons all make it clear that hr consulting firms should make every effort to retain valuable employees, as a laundry list of potential problems are avoided by doing so.