Articles

Employee Retention: Critical and EXPENSIVE

by Kirk Abraham @EASTeam

The market is winding up and many employers are considering adding staff.  However, many employees are ALSO considering making a change… (Both seem to feel safer about these activities)

FACT: Any business that doesn't do inventory and/or assess what it has, what it needs, what it does well, and what it does poorly will eventually go broke. Empirical Data is essential when making your extremely important, very expensive (and even more 'costly') Hiring Decisions.

 

Per Jeff Bosher, it's seven times easier to maintain an existing client than is to go out and get a new client. Jeff continues, "On a common sense level, it just makes a good business strategy to try to maintain as many existing clients as you can."


Doesn't a similar metric/philosophy apply towards existing Employees?

{jcomments on}

 

Statistics from our most recent 100 placements, as follows:

• 75% still Employed after 5 years
• 30% Promoted within <3 yrs
• Avg ‘Time to Fill' is <7 weeks
• 90% of business done w/repeat Clients

*NOTE* These are CONSERVATIVE estimates, as we didn't factor in RIF's, Plant Closings, Downsizing, etc… It's Black or White, ie, still employed with said client or no longer employed.

This seems to indicate: 
A) Our Clients are stable
B) Our Placements become Impact Players within the Organization.

What are your hiring stats? How much Direct Cost is related to identify, locate, recruit, hire, on board, train and develop new employees?

What about Indirect Costs? That's a bit harder to calculate…LOC (Lost Opportunity Cost) of not filling the opening faster, a better candidate, and/or time existing employees covering these responsibilities, etc.

You do know, right?? (wink, wink, nudge, nudge) 

Bottom Line: If it cost's you ‘X', how much would be saved (or earned) by improving your 5 year retention rate by 25, 50 or even 100%? What say you??