You’re the owner of a new retail outlet. You smirk when your competitor down the street invests in a $100,000 day-care center for workers’ children and brings in a doctor once a week to treat employees and their families. “This guy doesn’t know much about protecting his bottom line,” you chuckle. But the facts speak for themselves. Your employee turnover will hover at about 400 percent annually. His will be 16 percent.
It is easy to underestimate the cost of interviewing and training new employees. This doesn’t include the expenses that can’t be accounted for—decreased productivity while an employee learns a new job, for example. If turnover is high, a big chunk of your company’s would-be profits may be dissolving—and you won’t even be able to account for the loss, because employee turnover is not an itemized expense.
One defense you have against high turnover is to put some energy into providing programs that improve employee commitment-levels. We can help you provide better benefits programs, improved training, and other “perks.”
Here are some other factors that influence employee “loyalty”
- Working for an “ethical” organization
- Day-to-day activities
- The company’s concern for the employees as individuals
- The organization’s reputation
- Fairness (including fair pay)
- Trust in employees
A PEO may be able to suggest other changes you could make in your “corporate culture” that would influence your employees’ willingness to be committed to your company.
The three types of employees:
- Loyal: Committed to their organization and planning to stay at least two more years (25%)
- High-Risk: Not committed, not planning to stay (33%)
- Trapped: Not committed, but planning to stay because they are trapped by lack of job skills, fear of losing stock-options, or the mistaken perception that there’s “nothing better out there.” (39%)
(Source: Lexis-Nexis “Take a Bite out of Your Job Turnover” San Francisco Examiner.)
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