Escalating competition for workers and a shrinking talent pool are coming together, giving employees the advantage in the job market and costing employers thousands of dollars per employee in turnover.
Employee Benefit News (EBN) reports that it costs employers 33% of a worker’s annual salary to hire a replacement if that worker leaves. In dollar figures, the replacement cost is $15,000 per person for an employee earning a median salary of $45,000 a year, according to the Work Institute’s 2017 Retention Report.
Indirect costs stem from knowledge lost when employees leave, the time spent finding a replacement and the time new hires need to become fully functional.
In exit interviews, the top reasons survey respondents gave for leaving their jobs were career development (22%), work-life balance (12%), managers’ behavior (11%), compensation and benefits (9%) and well-being (9%).
Most savvy business owners know that it’s much more cost-effective to hold onto a current customer than it is to go out and get a new customer. That’s why avoiding customer churn is such an important part of sound business performance, and why companies invest in loyalty and discount programs – to keep customers happy and increase the amount of repeat business they get.
The same idea holds true for employees, too. It’s not enough to just recruit the top talent – the real ROI in recruitment comes in retaining those top performers for years to come. Otherwise, employers are just spinning their wheels, replacing employees as fast as they recruit them. The official term for this cycle is employee turnover, and it can seriously disrupt an organization’s productivity levels and employee morale.
In a world where people are an organization’s most essential assets, companies need to be more strategic about how they think about talent retention to remain competitive.
Employees are just humans who happen to be at work. You’ve hopefully learned some ways to make other humans happy in your personal life, so take that knowledge and apply it to your workplace.
Once the basic need of sufficient income and job security has been met, move up Maslow’s hierarchy of needs and create a culture that enables growth, impact, and care.
Growth and opportunities mean different things for different people and different cultures, this can be a good reason to start an international program that would allow international talent the opportunity to compete for a job that would signify a great challenge and growth. International talent can also signify more loyalty towards the company and less turn over expenses.
If you are considering an international program for your company but the political climate is discouraging you, let us tell you about your options. With the help of a professional, you can significantly grow your talent pool and decrease your retention and turn over costs.
If you are interested in information about starting an international program contact us here.