The Real Cost of Employee Retention

August 14, 2017

Countless studies have revealed that young professionals take a fluid approach to job “stability.” Younger millennials are changing their jobs just about every two to three years rather than sticking around for a pension.  For employers, this can be a nuisance. Typically, companies want to hire promising individuals that show a desire for growth within their organization. This is why the common “Why do you want to work here?” question always comes up in the interview.

Hiring candidates that align with a company’s culture and replacing existing employees can be down-right tedious and pretty costly. How costly? In extreme cases, the money that companies shell out for hiring or replacing an employee can be anywhere from three times the position’s salary. And that doesn’t include the time it may take to fill that position, any lost opportunities, and the missed revenue that may have occurred while the vacancy was opened.

To better understand the cost of retention, it’s important to note that there are two types of losses a company experiences when they lose an employee. Indirect and direct. A direct cost is all the money that the company will use for promoting the vacancy through job board platforms. Also included is the price of creating a job. Work incentives, promotions to raises, and flexible scheduling are taken into consideration here.  Indirect costs include all the knowledge and information that a previous employee knew and the potential decline in morale from the team after their departure.

With turnover rates at an all-time high, the selection process is getting tougher and tougher. Employers are becoming reluctant to take the risk of a bad investment with little longevity.

This insight shows us why it is so important to be the type of professional that companies can see long-term value in. While some companies have adjusted to the lack of long-term interest from the new pool of professionals in today’s workforce, most employers still desire loyalty. Key markers of a successful hire are similar across the board. Employers want to know that you are dedicated!

Want to communicate your long-term value to an employer in your next interview? In Dale Carnegie’s Training Course, you can develop the ability to show the markings of a future asset to any company. Each session in the course is designed to help you fine tune your communication skills for business and beyond.

Ready to start gaining transformative communications skills? Sign Up Now!

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