Last week our blog focused on the best way to attract top talent. We know how much value they can add to your business, so once you have reeled them in, you want to make sure you keep them! Too many employers lose their best talent because they don’t invest in the time to understand what really motivates them to be their best in the job.
It WILL cost you – it may cost you time or money, or both. But investing up front will save you in the long run. Have you ever considered the cost of replacing an employee? You might think it doesn’t cost you very much at all – maybe you just think about the cost of advertising in the local paper, or of taking a few hours out to attend some interviews. Well think again. The cost of replacing an employee is significant and shocking – we’re talking exit costs, advertising costs, interviewing time and travel costs, orientation, training, lost productivity while the new employee comes up to speed, customer dissatisfaction, reduced or lost business, administrative costs, temporary workers, paying double wages while the old and new employee cross over…the list goes on!
Of course it is hard to say exactly what these expenses amount to, but some more conservative studies have estimated that the cost of replacing an employee for a mid level role is around 20 percent of that employee’s annual salary. Some experts have estimated it as being as much 1.5 times their annual salary! No small sum no matter which way you look at it!
So before you tighten the purse strings for the sake of ‘saving’ a few pennies, consider some things you can do to motivate and retain your current employees:
- Provide them with challenge
- Reward or recognise good attitude (not just skills)
- What pay structures will really suit and inspire your top performers
- Communicate –encourage staff to come to you with issues or ideas
- Actively manage poor performers – nothing hampers one employee’s good performance like the poor performance of a peer
- Do the little but not insignificant things – a voucher for dinner after completion of a tricky project, closing the office early before a holiday weekend, awarding personal or ‘duvet’ days etc.
Thinking ahead and being willing to invest a little time, effort or money into making your current employees feel valued and worthwhile will save you a lot of heartache and stress further down the road.
by Susan Toynbee