In the current economic situation, this may be a good question. With the unemployment rate at 3.8% (www.ons.gov.uk), the lowest since 1974, this might be a good question; I think there might be a better one. I believe every organisation should be asking themselves how much it would cost to lose ambitious, motivated and valued talent. Companies are aware that a “job-for-life” doesn’t exist anymore; offering financial incentives and a drive for diversity is stronger than ever before.
Employee retention should be a top priority for every HR department because it’s not only good for the company’s profitability but also cultivates a positive culture and increases morale and productivity.
But let’s go back to the cost of finding a new employee and losing a team member. There are various scenarios and cases, but the general rule of thumb seems to be that replacing an employee at a senior level would cost the company three times their average salary (www.peopley.co.uk). It is a mind-blowing number, and this doesn’t include dips in productivity, impact on the employer brand equity and business resilience, as well as the potential loss in client relationships—sobering and eye-watering facts.
In many cases, these situations are predictable and easily avoidable at a much lower cost. Let’s look at the ways how organisations can cut the cost of negative employee turnover in the company.
Here are some solutions for keeping high-performing and valuable team members.
- Building a compelling and supportive culture is always a winning solution, as culture is hard to replicate. Bringing the human factor into the workplace: understanding employees’ lives outside work and the impact they might have on their choice of workplace.
- Creating unique policies. Cookie-cutter policies no longer work, but offer an upper hand over the competition, i.e. shared or “gender blind” parental leave.
- Providing desirable benefits and rewards. A gym membership might be desirable for some, but an on-site creche might help with employee childcare problems.
Losing talent is expensive, whichever way you look at it. Losing female talent is even harder on a company’s budget and brand reputation.
The above solutions are more cost- and time-effective than finding new candidates. These will also help to attract diverse talent in the long run.
I see them as an investment rather than a cost, and if done well, they can drive companies to the top of the “Best company to work for” chart.
Book a call to discuss how you can reduce the cost of losing diverse talent.