I mentioned earlier that now is the time to begin cautiously expanding your business. It’s also time to start looking at what you will do to retain employees. Why? Because of the cost of employee turnover.
I have seen it reported that the cost of turnover is up to 150% of an employee’s salary. Here is one study that is based on an $8/hr. employee and the costs are significant. And here is a calculator that estimates the cost of turnover based on salaries and benefits.
If we are going to have the long slow climb out that we are being told we will have (like the 1970’s), then we do not want to jeopardize our profits by having excessive turnover costs. Many of us will want to fund our growth organically, avoiding leverage. So that provides even more reason to avoid costly employee turnover.
So what programs and initiatives are you putting in place to make sure you minimize this costly problem? Matthew Kelly in his book “The Dream Manager” has given us an idea. It’s not a new idea really, but it is one we all seem to forget. We all know that if we focus on helping others achieve their goals and dreams, then somehow, the universe provides for us as well. Kelly’s idea is that if companies take the time to help their employees define what it is they “dream about accomplishing” in their personal lives, then they in turn will remain loyal and productive. Even if achieving their dream requires that we eventually lose them as employees, we will be better off because they will be a positive spokesperson for our company.
So the question is, “What are you doing now to avoid excessive turnover as we work our way out of this recession?” Are you brave enough to employ a dream manager?