How much will it cost when your key people leave?

NetworkingHow likely are you to lose your key employees?

According to Gallup, only one-third of U.S. employees are engaged in their work and workplace. And only about one in five say their performance is managed in a way that motivates them to do outstanding work. What’s worse, 51% of employees are actively looking for new jobs.  The answer is, you are very likely to lose an employee very soon.

How much will it cost when your key people leave?

What does it cost to replace an employee?  The range is large, but it is expensive at any level.  Studies show it can cost 20% of a low-to-mid-range position and more than 200% of a high-level or executive position.  Let’s look at the numbers.  The cost to replace a mid-range administrative manager being paid $40k would be about $8k.  But the cost of a highly educated contributor, director, or executive who’s paid over $200k would be over $400k.

What goes into calculating turnover costs?

  • Hiring (advertising, interviewing, screening, hiring)
  • Onboarding (training and management time)
  • Lost productivity (months, years to match a high performer’s level of performance)
  • Low team engagement (other employees are affected when someone leaves)
  • Customer service and errors (new people don’t know what they’re doing and make mistakes)

The costs may be much greater in your company, especially if a key person leaves at a critical time.  Missing a release deadline could cost the company funding or market share.  Lost knowledge could cause a faulty product to be released.

How will you keep your best people?

The top way to keep employees today is to engage them.  This means allowing them to do meaningful work that helps them grow.  When people are doing something that matters and are growing in the process, they are likely to stay.

Sixty percent of employees say the ability to do what they do best in a role is “very important” to them.  The problem is that people often don’t know what they do best, and it’s even harder for their employers to know.  The solution is to assess what people’s natural talents are and let them do work where they apply them.

A fun way to assess people’s natural talents is in a team-building session where people self-assess and share their talents with their team members.  People get excited about their discoveries and they learn how to better engage each other in projects.

If you are leading a team and you want to keep your key players, you may want to give our Strengthen Your Team Team-Building Activity a try.  It costs only a small fraction of what it costs to lose someone, and it will pay back even more in terms of the increased productivity and engagement of your team.  You will also have fun discovering how your own natural talents come into play.

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