EMPLOYEES

Have you ever considered what it costs your company in employee turnover? The attitude of most companies concerning employees is….”there are more where they came from.” Yes, people have become a “commodity” that we seem to have an abundance of according to the U.S. Census Bureau. The U.S. Census Bureau reported that the nation’s population reached the historic milestone of 300 million on Oct. 17. The bureau also states that there is an increase in the total population of one person every 11 seconds.

This attitude towards employees is costing your company in employee turnover costs. Companies need to realize the cost of losing and then having to replace an employee. Understanding this cost will help to understand why it is important to keep your employees by investing in them.

The Center for Community Economic Development has developed an online employee turnover calculator. The first step in understanding why it is important to keep your employees is to understand how much it is costing your company to replace employees The five major cost categories identified in this worksheet are: separation costs, replacement costs, training costs, vacancy costs and performance differential. This worksheet does make the note that only tangible costs are included on this worksheet. Although intangible costs can be substantial to a company, they are much more difficult to calculate. Therefore, this worksheet only shows you a portion of the actual cost to you of employee turnover.

  Employee Turnover Worksheet

After completing the worksheet you will have a new perspective to losing your employee. Now the question becomes how do I keep my employees? Go back to the second paragraph and read it again—“investing in them.” Two major ways to invest in your employees and to retain them for your company are by orientation and training. How does this help? Watch for my next article on this subject.

Until then…