By: Dr. Donald E. Wetmore
Employee turnover, the loss of good employees, no matter how low that rate is, significantly takes away from your bottom line because it is costly and it reduces productivity. Reducing turnover significantly reduces those replacement expenses.
How much does turnover cost? You have to include lost productivity, lost opportunity cost, (you can’t be spending your time on getting new customers and new jobs while you’re interviewing and training a new employee) and recruitment costs and while there are many variables, research indicates that even for entry level person of say $30,000 in compensation, the replacement cost can be as high as 40% $12,000.e? st can behigh aselyth youh additional things ree
“80% of employee turnover stems from mistakes in the hiring process.” Harvard Business Review
Every contractor has turnover expenses. No employee stays forever. But turnover expenses can be better managed and reduced.
Those who are satisfied with their bottom line, as it is, or believe that these replacement costs cannot be reduced, will maintain their status quo and get by.
Here are six building blocks for improving employee retention by reducing unnecessary turnover.
- Targeted candidate recruitment. To make a good soup you need to start with the right ingredients so it is important to clearly define the perfect candidate for your unique needs. Search efforts then need to be designed and carefully targeted to source a pool of those ideal candidates.
- Effective interviewing skills. Some contractors are not skilled in the art of the interview and focus too much time on the company and the interviewer. 80% of the interview should focus on the candidate using prepared questions to determine not only the candidate’s abilities and how they fit the requirements of the position, but their unique needs and goals.
- Preparation of a unique and acceptable job offer. When you have the right candidate you need to seal the deal. More than just money, it needs to be communicated how accepting your offer will mesh with the candidate’s unique goals in all of their areas of their life.
- A comprehensive on-boarding process. This is much more than providing a company employee manual. It is a comprehensive process that starts with day one, then week one, then month one, then year one and beyond to insure a smooth and permanent assimilation into the team and their job. You want to avoid having the new candidate go home after their first day and wonder, “What was I thinking when I took this job?”
- Effective management skills. Being an effective, positive leader who is authentic and candid, and provides the investments of ongoing training, tools, techniques and resources necessary to enhance the employee’s development, productivity, satisfaction and retention.
- Effective motivating practices. Making it a planned policy to catch employees “doing things right” and providing regular encouragement, helping them to achieve their personal and professional goals, will not only enhance their productivity but increase employee engagement and retention.
If you short change any one of these six building blocks, you diminish the likelihood of getting to the important goals of increasing employee productivity and reducing unnecessary turnover and retaining your key employees.
I provide unique consulting for clients who desire to increase their employees’ retention rates and reduce turnover rates, helping them develop their Six Building Blocks of Employee Retention practices. For an initial consultation call me at: 203-386-8062 or email your request for “retention” to: firstname.lastname@example.org
Dr. Donald E. Wetmore
Certified Executive Coach, Consultant and Trainer
Author, “Organizing Your Life” and “The Productivity Handbook”
Personal Productivity Solutions to Leverage Your Impact
127 Jefferson St.
Stratford, CT 06615
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