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Hang on to Employees to Boost the Bottom Line

Hang on to Employees to Boost the Bottom Line
From Recruiter - October 28, 2016

Many companies hemorrhage money in ways they cant seem to control. High employee turnover is one of these areas in which many businesses struggle. While attractive benefits programs and incentives are the more obvious costs of most organizations retention efforts, oftentimes, those expenses could be easily offset by lowering the number of employees who need to be replaced. Getting the boardroom to take meaningful action to address turnover, however, requires data.

The problem is not that executives cant track turnover costs. With time, effort, and the right tools, tracking those expenditures can be accomplished easily and efficiently. The problem is that, once the issue is brought into the light, many businesses arent sure what to do about it.

Many companies do track turnover. However, just because they know they have a costly problem doesnt mean theyre taking the right steps to fix it, says Lori Farley-Toth, regional vice president of employment agency Adecco Staffing USA. In the haste of avoiding business interruption, many employers sidestep the root of a turnover issue or fail to recruit the best replacements, ultimately inhibiting the success of their workforce. In addition, some businesses see the hard cost of turnover and overlook the soft costssuch as morale or reputationwhich can take a toll on the bottom line in the long run.

Identifying the Problem

Before taking steps to impact the bottom line byreducing turnover, companies must determine the amount of the losses they are incurring. These costs are specific to each individual company and are often impacted by factors such as company culture or benefit offerings, so averaging across verticals or industries can be difficult. Executives who want to improve turnover to impact the bottom line need to drill into their own companies to figure out where the problems are.

While turnover costs vary by career stage, geography, and industry, companies should look at costs from a holistic perspective, says Farley-Toth. Beyond the hard financial costs, there are soft costs that should be considered in order to understand the full impact of turnover on a company. Employers should also avoid benchmarking based on national average turnover costs or rates and instead assess what the ideal retention model looks like for their own business. And then, strategize ways to get there.



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