The Cost of Keeping Your Staff

Laurence Harrould - Friday, March 05, 2010

For many businesses staff costs are the biggest expense they have. If you’re a business owner check your P&L to see what proportion of your outgoings are directly or indirectly staff-related. I suspect you’ll find you spend a considerable amount on the maintenance and upkeep of equipment but how much are you spending on the maintenance of your most important asset, your people?

Consider the situation of someone leaving. We’re assuming this is a good employee who has the right attitude, is loyal, honest and committed as well as having the perfect skill set for your business. What happens when they leave?

Firstly, you need to find a replacement. This is costly both in time and money. Should you decide to do the recruiting exercise yourself you’ll need to learn how to write and place ads in various media outlets; newspapers, Seek, magazines etc. Then you’ll probably receive hundreds of resumes, often many pages long. You’ll need to spend time going through all these applications to narrow them down to an initial short list. Then there’s the interview process, reference checking, skills testing and the list goes on. Do you have the time for this?

Alternatively, you may opt to employ the services of a recruitment consultant. This takes away many of the tasks listed above but you’ll still need to interview at least 3 or 4 candidates. Your recruiter can assist with this process to ensure the best possible fit - ultimately though it has to be your choice.

Once this person starts, how long will it be before they’re up and running effectively? It often takes months or even years to have people operating at the level you’d like. Part of this process may include the need for skills training for which there are additional costs.

As well as these costs in time and money the other issue is the loss of “corporate” knowledge when an employee leaves. They know your customers and in a business where relationships are critical (and isn’t that all of them?) these connections are lost.

What’s your staff attrition rate? How often do you need to replace your employees?

As you can see it’s a much better business decision to retain your staff rather than replace them. One of the big mistakes business owners make is thinking this involves paying more, often it doesn’t. What it does involve is an understanding of what motivates people to stay. This is especially important if you’re employing GenY staff.

Aviel provides training and support for business owners and managers in the tools and techniques to ensure good employees are kept for as long as possible. Contact us (click here to email or phone 02 8282 5295) to find out how we can help you reduce your staff attrition rate.

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