NEW HIRES: HOW TO FIND THEM, HOW TO KEEP THEM
NEW HIRES: HOW TO FIND THEM, HOW TO KEEP THEM
Most organizations do not realize how costly turnover really is. The costs associated with poor employee retention go far beyond the costs of recruitment and selection. Costs that are rarely considered when an employee turns over include training costs and lost productivity. And when an organization recognizes that these costs are a part of the turnover equation, they typically fail to realize their full impact. For example, training costs include the cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. Also include the cost of orientation materials. Calculate the cost of departmental training as the actual development and delivery cost plus the cost of the salary of the new employee, the cost of the person(s) who conduct the training, the cost of various training materials needed including company or product manuals, computer or other technology equipment used in the delivery of training, and the cost of supervisory time spent in assigning, explaining and reviewing work assignments and output. This represents lost productivity of the supervisor.
Lost productivity includes the cost of mistakes the new employee makes during training, the cost of lost department productivity caused by a departing member of management who is no longer available to guide and direct the remaining staff, the impact cost on the completion or delivery of a critical project where the departing employee is a key participant, and the cost of reduced productivity of a manager or director who looses a key staff member, such as an assistant, who handled a great deal of routine, administrative tasks that the manager will now have to handle.
When all the costs associated with turnover are considered, it is typical for the total to easily reach 150% of the employee’s annual compensation figure. The cost will be significantly higher (200% to 250% of annual compensation) for managerial and sales positions.
To put this into perspective, let's assume the average salary of employees in a given company is $50,000 per year. Taking the cost of turnover at 150% of salary, the cost of turnover is then $75,000 per employee who leaves the company. For the small company of 100 employees who has a 10% annual rate of turnover, the annual cost of turnover is $ 750,000.00!
Wouldn’t you like to add to add $ 750,000.00 to your revenue, most of which could be carried over to the profit line? Reducing turnover can have that kind of impact.
So, how do you reduce turnover? One way is to eliminate much of the subjectivity of the selection process. Once an employer has attracted a pool of qualified candidates for a job opening, choosing the one candidate that best fits the job is often the result of subjective processes. Companies typically spend hours objectively analyzing the benefits of purchasing a new piece of equipment, but they often spend far less time interviewing candidates, the results of which are often based on subjective feelings as to which candidates seem to be the best.
There are many tools employers can use to make the selection process more objective. The most commonly used of these include background verification services, skills testing and job-fit testing.
With today’s media savvy population, employers are encountering job applicants that are resume assisted and interview–wise. They know how to impress interviewers with resumes and backgrounds that may be more contrived than real. Background verification services can help you determine whether a candidate’s employment history jibes with what he or she has claimed. Background verifications, such as credit history, driving record, and criminal history can also provide you a glimpse as to the integrity of the candidate.
Job skills testing is one way to verify whether the candidate possess the skills you need. Job skills testing involves assessments which measure specific, practical skills and knowledge related to a particular task. Tests of this type include mechanical aptitude assessments and skills tests for production, processing, operations and maintenance. Skills testing is not limited to mechanical skills however. There are skill-based assessments for sales and management, as well.
A third tool employers can use to reduce turnover is job-fit testing. Job-fit testing differs from skills testing in that it provides feedback as to the mental skills and personality traits an individual possesses relative to those desired by an organization or required for success in a particular job. Most turnover is not the result of technical incompetence, but the result of a poor “fit.” The employee couldn’t get along with others or couldn’t perform the work due to a personality mis-match with the job. Job-fit testing can help you predict job fit before hiring a candidate, thus eliminating one of the most significant reasons for turnover.
One job fit assessment that employers have used to improve their rate of retention for more than 40 years is the Achiever. The Achiever is unique in that it is the first assessment to be specifically developed for use in a business environment and to combine mental aptitude measurements with the behaviors critical for success in business. The Achiever also incorporates benchmarking capability allowing an employer to compare the aptitudes and traits of applicants to those required for success in the specific job for which the applicant is being considered. This benchmark comparison provides a “picture” of the likelihood the applicant will be successful in the job and gives the employer more assurance that the best applicant is being selected, thereby improving job performance and reducing turnover.
Turnover is a pernicious problem, the costs of which are largely un-recognized by employers. A significant factor in turnover is that most organizations have a more rigorous set of technical specifications for purchasing a new piece of equipment than they do for hiring a new employee, though the turnover cost of the new employee can often be far higher than the cost of the new piece of equipment. Employers have tools available to them to perform an objective analysis on new hires, much as they do on new equipment. And the human capital of an organization has a much greater return on investment than the physical capital.
NEW HIRES HOW TO FIND THEM HOW TO KEEP THEM - To learn more about this author, visit Milton S. Cotter's Website.
Like this article? Share it with your friends
You have just spent several hundred dollars running an ad to attract candidates for a job opening and you have received dozens of resumes to review. From those resumes, you must identify the individuals that have the best qualifications for the job. After selecting those candidates most worthy of an interview, you spend a few hours talking to them to determine whether they are a good fit for the job and your organization. Finally, you decide on one candidate, the hire is made and you hope everything works out so you don’t have to spend a few hundred dollars more in ad costs and the time to screen another round of candidates. But are you really just spending a few hundred dollars on ads plus the time to screen the candidates? What does losing an employee really cost?
Most organizations do not realize how costly turnover really is. The costs associated with poor employee retention go far beyond the costs of recruitment and selection. Costs that are rarely considered when an employee turns over include training costs and lost productivity. And when an organization recognizes that these costs are a part of the turnover equation, they typically fail to realize their full impact. For example, training costs include the cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. Also include the cost of orientation materials. Calculate the cost of departmental training as the actual development and delivery cost plus the cost of the salary of the new employee, the cost of the person(s) who conduct the training, the cost of various training materials needed including company or product manuals, computer or other technology equipment used in the delivery of training, and the cost of supervisory time spent in assigning, explaining and reviewing work assignments and output. This represents lost productivity of the supervisor.
Lost productivity includes the cost of mistakes the new employee makes during training, the cost of lost department productivity caused by a departing member of management who is no longer available to guide and direct the remaining staff, the impact cost on the completion or delivery of a critical project where the departing employee is a key participant, and the cost of reduced productivity of a manager or director who looses a key staff member, such as an assistant, who handled a great deal of routine, administrative tasks that the manager will now have to handle.
When all the costs associated with turnover are considered, it is typical for the total to easily reach 150% of the employee’s annual compensation figure. The cost will be significantly higher (200% to 250% of annual compensation) for managerial and sales positions.
To put this into perspective, let's assume the average salary of employees in a given company is $50,000 per year. Taking the cost of turnover at 150% of salary, the cost of turnover is then $75,000 per employee who leaves the company. For the small company of 100 employees who has a 10% annual rate of turnover, the annual cost of turnover is $ 750,000.00!
Wouldn’t you like to add to add $ 750,000.00 to your revenue, most of which could be carried over to the profit line? Reducing turnover can have that kind of impact.
So, how do you reduce turnover? One way is to eliminate much of the subjectivity of the selection process. Once an employer has attracted a pool of qualified candidates for a job opening, choosing the one candidate that best fits the job is often the result of subjective processes. Companies typically spend hours objectively analyzing the benefits of purchasing a new piece of equipment, but they often spend far less time interviewing candidates, the results of which are often based on subjective feelings as to which candidates seem to be the best.
There are many tools employers can use to make the selection process more objective. The most commonly used of these include background verification services, skills testing and job-fit testing.
With today’s media savvy population, employers are encountering job applicants that are resume assisted and interview–wise. They know how to impress interviewers with resumes and backgrounds that may be more contrived than real. Background verification services can help you determine whether a candidate’s employment history jibes with what he or she has claimed. Background verifications, such as credit history, driving record, and criminal history can also provide you a glimpse as to the integrity of the candidate.
Job skills testing is one way to verify whether the candidate possess the skills you need. Job skills testing involves assessments which measure specific, practical skills and knowledge related to a particular task. Tests of this type include mechanical aptitude assessments and skills tests for production, processing, operations and maintenance. Skills testing is not limited to mechanical skills however. There are skill-based assessments for sales and management, as well.
A third tool employers can use to reduce turnover is job-fit testing. Job-fit testing differs from skills testing in that it provides feedback as to the mental skills and personality traits an individual possesses relative to those desired by an organization or required for success in a particular job. Most turnover is not the result of technical incompetence, but the result of a poor “fit.” The employee couldn’t get along with others or couldn’t perform the work due to a personality mis-match with the job. Job-fit testing can help you predict job fit before hiring a candidate, thus eliminating one of the most significant reasons for turnover.
One job fit assessment that employers have used to improve their rate of retention for more than 40 years is the Achiever. The Achiever is unique in that it is the first assessment to be specifically developed for use in a business environment and to combine mental aptitude measurements with the behaviors critical for success in business. The Achiever also incorporates benchmarking capability allowing an employer to compare the aptitudes and traits of applicants to those required for success in the specific job for which the applicant is being considered. This benchmark comparison provides a “picture” of the likelihood the applicant will be successful in the job and gives the employer more assurance that the best applicant is being selected, thereby improving job performance and reducing turnover.
Turnover is a pernicious problem, the costs of which are largely un-recognized by employers. A significant factor in turnover is that most organizations have a more rigorous set of technical specifications for purchasing a new piece of equipment than they do for hiring a new employee, though the turnover cost of the new employee can often be far higher than the cost of the new piece of equipment. Employers have tools available to them to perform an objective analysis on new hires, much as they do on new equipment. And the human capital of an organization has a much greater return on investment than the physical capital.
NEW HIRES HOW TO FIND THEM HOW TO KEEP THEM - To learn more about this author, visit Milton S. Cotter's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
|||
Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
|||
Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to Milton's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
 |
||
|
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Press Advertising Business / Personal Plan Tips For Less Stress Ideal Client Content Challenged |
|
 | ||
 |
Top 50 Franchising Blogs
Top 50 Franchising Blogs | |
 |
Top 50 Raising Capital Blogs
Top Blogs To Watch In 2008 | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
| ||||||||||||
| ||||||||||||
|
|
||||||||||||