“I quit.”
These are words that every successful entrepreneur and business owner fears to hear from their best employees.
When a good employee leaves you, the costs of replacing that employee can be very significant for your business. For a skilled employee, I estimate the cost to be between 100% and 200% of that employee’s salary. It can be higher if your employees require extensive training and certification or your industry or business is unique.
Tangible costs include recruiting costs, management time to interview and hire, training and development costs to get the new employee up to speed (this can take years for certain skilled positions), lost productivity due to training and mistakes, administrative costs to process new employees and lost revenues due to lower productivity.
Intangible costs include the stress and workload put on your remaining employees when a key employee leaves, management distraction to replace an employee instead of growing the business, risks to your reputation when customers don’t receive responses as quickly or as competently as before, and lost momentum from having an employee with several years of experience and key customer relationships leave your business.
To retain your best employees, ensure that you are communicating frequently with them, provide a clear career plan for them, and acknowledge their contributions to your business and your customers’ successes.
When they leave, it’s usually not about the money, even if they say it is.
Use your unique advantages of size, culture, values, leadership and industry to provide long-term opportunities for your best people.
Are your best employees at risk?
Copyright Phil Symchych 2011. All Rights Reserved.
