What is the true cost of losing a team member?
For any SME, having a member of the team leave your organisation can certainly be a very painful experience. When a valuable staff member walks out the door (often straight through the door of a direct competitor), a small business owner will usually ask themselves, "What could I have done better to keep them here?"
However preventing someone from leaving the business is not only the result of a good staff retention strategy, but can in fact be traced back to the initial recruitment process (and staff attraction strategy).
The cost of losing a team member is not just the cost of re-running an advertisement online or in the local press. Nor for that matter is it simply the recruitment fee paid to a traditional recruitment agency which can be as high as 18% - 20% of the annual salary package (or even to RecruitLoop where the cost of recruitment can be slashed up to 80%).
For example you also need to take the following into consideration:
- the value of the intellectual property walking out the door;
- the team morale that may slide as a result of the remaining staff having to take on an additional workload;
- customer dissatisfaction and the quality of work or service standard that may slip due to newly created work pressures and deadlines;
- loss of productivity
- clients that may have had an allegiance with the former staff member; and
- the cost of training the new staff member and getting them up to speed.
It has been proven that the true cost of losing a staff member can be up to three times the person's annual salary - depending on their level within the organisation.
So having the right candidate attraction and recruitment strategy in place from the outset is critical - particular for an SME.
When you are on the hunt for someone new, remember you are not just looking at their ability to get the job - something which you can guess at based on their CV. It’s more important to look at their ability to do and ideally excel in the role.
Easier said than done.
Clarity from the outset is key. Ensure that anyone you interview (through your own channels or via a recruiter) understands exactly what you expect from them in terms of their on-boarding, up-skilling and actual performance on the job. Don't force the fit and let nothing be assumed. Discuss specific KPI's or other success measures in the very first interview. Talk about milestones and where you expect them to be.
Whatever you do, don't let your emotions take control. Don't hire in your own image and remember it's important not to build a team full of mini-yous.
It's worth investing more time up front ensuring you bring the right person into the team, rather than having to suffer both the emotional and financial consequences of a rushed or poor hire and the ripple effect it can have on your team further down the track.
Thinking about hiring new staff? Find out how you can save on the recruitment process with RecruitLoop and connent with expert recruiters online.