Howdy pchute!
The cost to retain an employee is their salary and benefits.
However, the cost of losing (through them leaving or being
fired) an employee averages 150% of their salary and benefits.
Positive Results web site:
http://www.positiveresults.com/sales_hiring/index.asp
"The cost of replacing an employee averages between one
and two times the candidate's salary plus benefits. So
for a $50,000 salary the cost of losing that candidate
ranges between $65,000 and $115,000."
Management pages at About.com:
http://management.about.com/library/weekly/aa051099.htm
"A study evaluating the effects of the US Family Medical
Leave Act found that 'turnover costs for a manager average
150% of salary, including tangible costs of hiring new
workers and relocation, and intangible costs such as the
new worker's inefficiency and lost productivity while the
job is vacant.'"
The Novations Group, Inc.web site:
http://www.novations.com/solutions/retention.asp
"The Saratoga Institute estimates that the cost of a
departing employee is one and a half times annual salary
plus benefits: an employee with a $50,000 salary and
benefits amounting to $15,000 who leaves will cost the
company 1.5 times $65,000, or $97,500 ..."
The Herman Group's web site:
http://www.herman.net/store/bliss_article.html
"Would it surprise you to learn that it will cost at
least 150% of a person’s base salary to replace him or
her? Actually, the more you pay a person, the higher
that percentage will be -- because the more you pay this
person, obviously, the more you value their contribution
to the growth and success of your business."
The Transaction World Magazine's article "The Importance of
Employee Retention" by Ed Schmitt puts some of this into
perspective.
http://www.transactionworld.com/articles/2001/july/hiring1.asp
"... the following cost calculation formula: Number of
Employees Lost x Average Salary x 30% = Annual Turnover
Cost. The 30% figure is a combination of a conservative
cost estimate of the departed employee's salary and the
time associated with the elements mentioned above. For
example, assume a company has 5,000 employees with the
average salary of $35,000. Now assume the annual turnover
rate is 25%. The costs would break out this way:
5,000 x 25% = 1,250 (employees lost in one year)
1,250 x $35,000 x 30% = $13,125,000 (total turnover cost in one year)"
There are hidden costs that can't always be measured in dollars
according to the Speakers Platform's article, "Employee Retention:
Your Key to Bottom Line Success" by Roger E. Herman, CSP, CMC
http://www.speaking.com/articles_html/RogerE.Herman,CSP,CMC_1038.html
"When you have a stable workforce--few, if any, people
leaving unexpectedly--you also enjoy a good morale."
...
"Continuity is priceless. When people have been around for a
while, there`s a sort of flow that keeps everything moving."
...
"You and your managers and supervisors don`t have to worry
about hiring and training new staff all the time."
Search strategy
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If you need any clarification with this answer, feel free to ask.
Looking Forward, denco-ga |
