Ever been in the dilemma either to let go or compromise with an employee?
The costs of replacing an employee who is paid $8.00 per hour; when all factors were weighed in, costs totaled $3,500.
Replacing entry-level employees cost 30% - 50% of their annual salary; mid-level costs 150% of their annual salary, and high-level costs, a staggering 400%.
So, what's your decision after that?
The costs of replacing an employee who is paid $8.00 per hour; when all factors were weighed in, costs totaled $3,500.
Replacing entry-level employees cost 30% - 50% of their annual salary; mid-level costs 150% of their annual salary, and high-level costs, a staggering 400%.
A comprehensive calculation would include the following turnover expenses:
- Administrative costs
- Recruiting
- Interviewing
- Hiring
- Orientation
- Training
- Training pay and benefits
- Lower productivity
- Increased in customer dissatisfaction
- Lost proficiency
- Exit costs
- Temporary workers
If you let go ONE of your human resources, there are several occurings, such as: company lowers productivity as the result of one less employee doing the work. The consequences are that jobs don’t get completed.Or if you try to cover the vacancy with internal resources: Employees trying to do the work of two, are often unable to deliver the same quality of work as before. This situation affects employee satisfaction and attitude, and increases customer dissatisfaction. And if we consider the employee as an investment: Learning about business practices, employee behaviors, supervisor’s expectations, best work procedures, and general company information takes time. When a person leaves their employment, they take their business know-how with them, becoming a valuable asset for the competition.
So, what's your decision after that?
PPS 
