How Much Does Staff Turnover Cost Your Business?
How often do you see staff you’ve interviewed, trained and developed walk out of your company? Have you ever questioned how this is affecting your business financially and what, if anything, you can do to change this?
In numerical terms, the cost of staff turnover was estimated in an Oxford Economics Report to be around £4.13 billion pounds to the UK economy in 2014; just to put that into context, that’s enough to fund the travel of every person living in the capital for a whole year. The CIPD estimates that this figure equates to an approximate cost of £4800 per employee you have to replace, a cost which could potentially be a huge burden to a small or medium size business .
Alongside the monetary cost of replacing an employee; it’s also important to think about how an employee leaving can affect your businesses productivity in the short term, and competitiveness in the long term. Productivity can take a serious downturn when replacing an employee due to the length of time taken for their replacement to be hired and learn their new role. The average time in the UK for a new employee to reach the same level of productivity as their predecessor currently stands at 28 weeks. In an event industry that is both ever changing and experiencing constantly decreasing lead times; a 28 week time frame can mean that this fall in productivity can now have an effect on two or three event cycles for a business. The competition for high performing staff is becoming a serious problem for businesses. The importance of retaining these high performing individuals cannot be undervalued; these individuals leaving your business may not only weaken your company’s position in the market, but may strengthen any competitor they join.
6 Simple Steps To Retain Your Best Staff
The seasonal and pulsating nature of events means that staff turnover levels in the industry are very high.As event managers, retaining your best staff can be vital, not only due to the cost of replacing these staff, but also because of the relationships these staff build with your clients and guests. Here are just a few simple steps your event business can take to ensure your best staff, remain your best staff and not somebody else’s best:
Increased Pay: A 2008 survey by the Society for Human Resource Management looking at employee job satisfaction found that an overwhelming 92% of employees stated that their salary level had a direct impact on their job satisfaction. Increased pay may be the most costly approach to employee retention for your business but, based on research by the Chartered Institute of Professional Development, it is also the most effective method. The key question for your events business is, is the cost to keep your employees greater than the cost of losing them to your competitors?
Increased Learning And Development Opportunities: Training and development is a key part of employee retention. Ramlall 2004 describes the importance training and development has on not only increasing the productivity of your employees, but also describes how the demonstrated commitment a company shows to an employee by investing in training them is then reflected in the commitment an employee shows to the organisation.
Improved Selection Techniques: Recruitment and selection plays a key role in staff retention for two key reasons. First is importance of selecting people that fit with the culture of your organisation; people that have the skills required but don’t fit in with your organisation can be one of the main reasons for high early turnover levels. The second is ensuring that the job role matches the employees expectations and skill level. Hiring an individual who isn’t qualified for the role will lead to them feeling overworked in the workplace along with leaving yourself feeling like they are under-performing. Both of these factors can again lead to very high turnover levels of new employees and further highlight just how important recruitment and selection really are in ensuring your employees stay with you.
Making Changes To Work Life Balance: The workplace is changing. A younger generation are gaining an ever increasing presence in the workforce. A survey of this younger generation, the so called Generation Y, those born between 1980 and 2000; showed almost half (42%) of this younger generation would only accept a job that allowed significant time off for leisure. Not quite the work focused, workaholic older generation we’re currently used to in the industry.
Improved Line Management Skills: The phrase ’employees leave people, not organisations’, may be slightly cliché but it is a phrase that carries a weight of truth behind it. Although there is no ‘one size fits all approach’ to management, it has to be remembered that a manager is the person who has the largest impact in you day-to-day life in the workplace, their significance cannot be understated.
Improved Benefits: A study by the Harvard Business School concluded that employee benefits have a significant impact on staff retention. So whether it’s a staff health care plan, travel reimbursements or staff discount on products, the sense of responsibility benefits give to an employee really do make a difference and it’s true, the small things in life really can make a difference!