One very common problem within all types of organizations is that experienced employees occasionally leave the company for one reason or another. Outwardly, it would seem that the leaders in the organization could easily replace the exiting worker. However, studies suggest that costs associated with replacing a long-term employee is much more expensive than just hiring an employee.
A common practice that compounds the problem is when the hiring committee brings in a new employee that has less experience than the previous worker. This is seemingly justified because you can hire the new employee at a lower wage, but the loss of experience and insider knowledge is often overlooked.
Cost for replacing an employee can be estimated by adding advertising costs, interviewing costs, training costs, and loss associated with a new emloyee making natural mistakes associated with learning something new. But don’t forget to factor in the “people costs.” Organizations are truly not about the building, products, or services that are associated with the organization, but are really more about the people of the organization.
Consider these costs:
1) Perhaps, customers who knew the exiting employee were only loyal to the organization because of the relationship they had with that particular employee.
2) Perhaps, other co-workers were productive and happy within the organization primarily because of a positive relationship with the employee who left.
3) Consider factoring in the costs associated with loss of customers who leave to continue doing business with the lost employee and tell their friends and family to do the same.
4) Consider costs associated with employees who are no longer satisfied with their jobs because of losing their co-worker.
5) How much would it have cost to keep the exiting employee(s) from leaving (and taking their relationships and experience with them) ?
The most-common reason workers leave their places of employment is dissatisfaction with their supervisor or other co-worker(s). However, while factors such as work environment, co-worker relationships and wage-rate do indeed have a bearing on employee satisfaction, studies suggest that when employees are regularly shown appreciation with both verbal recognition and tangible rewards they are generally more satisfied with their jobs. These employees will also work harder at making a positive difference withing the organization.
Bottom-line: Organizational leaders, follow these quick tips to help keep your talented workforce:
- Practice, practice, practice telling employees in a GENUINE WAY, how much you appreciate them. Be specific about what you appreciate. Be clear about what the employee does that you are recognizing him or her for. Give the recognition in private AND in front of other employees.
- Make sure everybody is getting paid what their counter-parts in other organizations are making—minimally, if not more.
- Most importantly–ALWAYS take the time to genuinely LISTEN to every employee that speaks with you. Show him or her that you value what they have to say by reiterating in different words what you hear from them and show them that you are at least considering their ideas. Chances are, they see something that you have overlooked.
If you do not take the time to listen or recognize employees, it may cost the organization much more in the long-run in terms of talent and experience lost than costs associated with fixing a problem.
Copyright © 2012 by Dr. Paul L. Gerhardt. All rights reserved.