Reduce Employee Turnover Costs

1. Reduce Employee Turnover Costs Executive SummaryReduce Employee Turnover CostsThere are many statistics and complex methodologies to support the notion thatemployee turnover costs are seriously affecting mid-sized enterprises. On the lowend, the Hay Group reports that the cost to replace an employee is 50% of their totalcompensation, including benefits. On the high-end, Hewitt & Associates puts the costbetween 100-150% of annual compensation. While executive management and salesstaff are more costly to replace, churn in any function affects the bottom-line.How Can You Retain Top Talent? • Share Long-Term Vision - it is critical that all employees understand the long-term vision for the organization to find real meaning in their work. In particular, star performers who are shut out of the high-level strategy and direction of the company will be the first to defect, while costing the most. • Conduct Employee Surveys - establish an annual Employee Satisfaction Survey to gather information and determine some of the reasons why people may be looking for greener pastures. Be sure to keep this anonymous. • Consider Flextime - for employees who are managed based on deliverables, consider implementing a flextime policy, which allows for telecommuting. Best Buy recently instilled a Results-Only Work Environment and boosted productivity in their corporate office by over 35%. • Offer Personal Days - consider offering 1 day per month/quarter for a personal day. This will allow your employees to take care of business in their personal life without having to call in sick to work for fear of persecution. • Create Focus Groups - bring leaders from each level in the organization together for informal employee focus group sessions. Discuss corporate culture, social activities, and the work/life balance at your company. Use our Facilitating Insightful Focus Groups report for advice. • Do Exit Interviews - last but not least, be sure to conduct an exit interview. Use Demand Metrics downloadable Exit Interview Questions Tool for help in this area.Action Plan:Discuss with HR - schedule a meeting with your HR Director to discuss strategiesthat will reduce churn. If necessary, get employee churn on the agenda for a seniormanagement meeting to get top-level support and buy-in. © 2009 Demand Metric Research Corporation