Measuring the cost of employee turnover is a global phenomenon posing a recurring challenge to employers all over the world. The question of what costs more: recruiting a new talent or retaining an old employee bothers companies to a huge extent. From an economic aspect, employee turnover creates disruption in a company’s overall employee productivity. It’s hard to devise a standard policy that works well enough to solve the situation of retaining the best talent or hiring a new. Nevertheless, employers with time find a way out and do best what suits their company norms.
Effects of Hiring New EmployeesThe monitory numbers associated with losing and hiring a human asset in an organization includes the the cost of sourcing, hiring, on-boarding, training. The concurrent intangible fee is the loss of engagement from others due to high turnover, lesser productivity of new hires, and general culture impacts. This is a kind of investment loss that no company accounts for. The detailed consequences of it include:
- Lower Morale and Engagement of Remaining Employees: Any company survives on a well-coordinated teamwork and a shared vision. When co-workers leave, remaining employees constantly have to cycle through the process of getting to know new employees.
- Lesser Productivity of New Hires: Expecting a similar performance by new hires by comparing it to a high-performance ex-employee, is not a great practice. However, this decreases the organizational performance rate and increases customer service errors.
- Disruption in Management: Constant change in employees makes it difficult to execute the plan as scheduled. Hiring new employees drain managers’ precious time and effort.
How Training Helps Retain Old EmployeesWhen it comes to employee retention, training sessions and methods prove to be effective. Especially the one's that offer employees new skills and ideas, internal training, reading, and meeting. These training sessions tend to replace much external training in organizations. Another reasons why trainings prove to be useful as they are a much cost effective solutions rather than hiring a new talent. Internal training are beneficial also because the training facilitator or resource remains available day in and out to participants much later than the training session. Such training sessions when conducted on a regular basis prove to be a tool of development in the organization itself thus entirely helping the employers to save costs, retain employees as well as avoid all the hassle looking for a new talent, training them all over again while still maintaining a high morale of the existing employees.
ConclusionEach employee that a company has represents an investment of money, knowledge and time. Even if it may seem like a challenge to retain employees, the actual benefits of it are quite clear. The major benefit of it being, a company ends up having a workforce that is dedicated, experienced as well as equal contributors for a company's success. This enables a firm to function smoothly and still be cost-effective in it's existence.
Key Takeaways from "RECRUIT VS. RETAIN: The Real Cost of Hiring and Turnover"
- The constant hustle of companies of retaining an old employee and hiring a new talent
- Effects other than monitory of hiring a new recruit
- Importance of training to retain employees
- Cost of retaining an employee is less than hiring a new one