Thu, Apr 12, 2012
There are a lot of elements that need to go into any calculation of the cost of employee turnover, said Roberta Matuson, president of Human Resource Solutions and author of “Suddenly in Charge: Managing Up, Managing Down, Succeeding All Around,” in this video from the Monster Resource Center.
“When we look at employee turnover costs, I encourage people to really drill down and look at the total expense,” including the time it takes to, write a job description, review applications, interview candidates and check references, she said.
You also have to look at the actual cost of drug testing or other costs that are specific to your industry and hiring practices, she explained. And you can’t forget the cost of training a new employee and the amount of time that person’s manager will have to spend to get him or her up to speed.
Those are only the costs involved with bringing in a new employee, though. People often forget that there also “are lots of expenses associated with termination” of an existing employee, Matuson said. When you let someone go you lose the time and money you spent training them. You may also lose future opportunities to work with clients who may follow the dismissed employee or just not want to work with your company once he or she is gone.
Luckily, it’s possible to avoid hiring mistakes altogether by establishing solid hiring practices, training every employee properly and by “being the type of leader that people look for,” said Matuson. “It’s your job to help [hires] become exceptional employees and they’ll need your feedback to do that.”