How does a high turn over rate end up costing a company MORE money? (letters, employee)
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How does a high turn over rate end up costing a company more money? Best I can guess, the only thing I can think of is they're going to have to keep training new people. How is that more expensive then keeping tenured employees around and giving them raises each year?
How does a high turn over rate end up costing a company more money? Best I can guess, the only thing I can think of is they're going to have to keep training new people. How is that more expensive then keeping tenured employees around and giving them raises each year?
Say training takes 3 weeks and newbies make $500/week. That's $1500 extra forked out with no production done.
Add to that drug-testing and background screens for new employees.
Also the fact that even AFTER training, newbies will still be nowhere near as productive as tenured workers. Often times, the new hires will make mistakes, which can lead to rather high repair/correction costs.
Say training takes 3 weeks and newbies make $500/week. That's $1500 extra forked out with no production done.
Add to that drug-testing and background screens for new employees.
Also the fact that even AFTER training, newbies will still be nowhere near as productive as tenured workers. Often times, the new hires will make mistakes, which can lead to rather high repair/correction costs.
All of this^^^ and the fact that newbies need more supervision until they come up to speed so a more experienced person needs to be around. More tenured employees can work independently and cover for other employees when they are absent. It takes less time and effort to manage them.
Say training takes 3 weeks and newbies make $500/week. That's $1500 extra forked out with no production done.
Add to that drug-testing and background screens for new employees.
Also the fact that even AFTER training, newbies will still be nowhere near as productive as tenured workers. Often times, the new hires will make mistakes, which can lead to rather high repair/correction costs.
Quote:
Originally Posted by Fiona13
All of this^^^ and the fact that newbies need more supervision until they come up to speed so a more experienced person needs to be around. More tenured employees can work independently and cover for other employees when they are absent. It takes less time and effort to manage them.
Ah, this makes sense. The cost of the trainer and the trainees/0 production crossed my mind. But unless it's a sales job or a job that directly impacts bottom line, I just find it hard to believe that keeping say... 100 employees around that perform well and get raises each year is less expensive than replacing all 100 employees every few months at their starting hourly wage.
In addition to training, running ads and interviewing is time consuming and costly.
I agree with everything you said, except the portion I put in bold letters. How is it "costly". It's not like you're paying anyone extra to interview and train these employees. The people involved in the hiring and training process would be paid the same anyways. Maybe my mind isn't wrapping around a core concept here...
A programmer with 30 years of experience may be able to build an entire system in the time it takes a nubie to figure out how to get started.
Yep.
For example, I design substations and utility distribution systems.
Some of the more seasoned engineers here can go to the job sites, do the surveying, interact with the client, set up cost/inventory/labor, etc., and perform the design work in the same amount of time it takes me to do my job. They are essentially doing what is meant to be done by 3 or 4 employees.
Them earning roughly double my salary is nothing to the company compared to the financial gains they receive.
Their goal is, in fact, to get as many engineers as they can to perform in such a manner, salary increases and all.
I agree with everything you said, except the portion I put in bold letters. How is it "costly". It's not like you're paying anyone extra to interview and train these employees. The people involved in the hiring and training process would be paid the same anyways. Maybe my mind isn't wrapping around a core concept here...
Generally, the interviewer is a manager of sorts. You are taking him/her away from regular job duties.
Yep.
For example, I design substations and utility distribution systems.
Some of the more seasoned engineers here can go to the job sites, do the surveying, interact with the client, set up cost/inventory/labor, etc., and perform the design work in the same amount of time it takes me to do my job. They are essentially doing what is meant to be done by 3 or 4 employees.
Them earning roughly double my salary is nothing to the company compared to the financial gains they receive.
Their goal is, in fact, to get as many engineers as they can to perform in such a manner, salary increases and all.
Unfortunately, many MBAs who are making hiring, firing, and layoff decisions ONLY see the bottom line cost of an employee and think they are all interchangeable.
Last edited by blktoptrvl; 12-17-2014 at 11:18 AM..
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