High-performing employees are estimated to contribute 400% more to work productivity than an average employee. When a valuable employee leaves, finding their replacement is never an easy task.
Anyone who has hired someone new knows the amount of time and energy required. Weeks of recruiting, interviewing, and training must be set aside, and that’s on top of the work that still needs to be done. It’s a process you want to avoid when possible. Stay productive and avoid the hassle of hiring by aggressively protecting your valuable employees.
The loss of a valuable employee rarely occurs without creating a sprawling impact that affects your customers, your management team, and other employees. In addition, it often translates into costly adjustments to the bottom line.
When a great employee leaves, you lose more than their unique perspective and learning experience — you lose their contribution to workplace culture. Their contributions to office morale and team happiness can be harder to replace than the skills needed to perform the job they were hired for. Finding someone to replace them becomes more of a challenge as you have to find someone with the necessary skills and who fits into your organization’s culture. But you can’t always gauge how well they’ll fit until they are an employee.
Another impact of losing valuable employees is a loss of productivity. How much of a toll does it really have on businesses?
Loss of productivity is one of the most significant setbacks for a small business. This loss begins the moment an employee decides they are going to look for another job. During that time, employees often experience up to 25% loss of individual productivity. That may not seem like much, but when accounting for a 3-month job search of an employee earning $100K, this can quickly add up.
When the employee finally does leave, company productivity takes another hit. The vacancy takes away time and resources from the team members tasked with finding a replacement. So the longer that position is vacant, the more it will affect productivity — and it can take weeks to find the right replacement. Unfortunately, the productivity decline doesn’t end when you make a new hire.
Hiring a competent individual is the goal of your hiring process. However, employees require time to get acclimated to the new position. This means even the most qualified hire still needs time to become “fully functioning.” Some suggest that this can take up to a year or even two and can contribute to losses of as much as $15K (for an employee with a $100K salary). This doesn’t include the dip in productivity levels for those training and mentoring new hires or the cost of hiring that new employee.
Some estimates suggest that the replacement cost of an employee can be as much as twice their annual salary in fiscal setbacks which is why protecting your valuable employees is critical. High-performing employees are more likely to search for new positions and more likely to leave for a higher paying offer than lower-performing employees. This means employers must actively look for ways to keep their employees satisfied. Another way to reduce costs is by taking steps to make the right hire the first time.
One way to reduce the risk of hiring the wrong candidate is to conduct thorough pre-employment screenings. Incorporating this tool into your hiring process contributes to greater hiring successes, even in high-turnover industries. Why? By pre-screening candidates, you’re able to weed out low-quality applicants. Screening applicants allows you to quickly determine if they meet the necessary requirements for education, work experience, and certifications. It also ensures that they don’t have a criminal background that would disqualify them.
You won’t always be able to keep great employees from leaving, but you can take action to limit the amount of turnover in your business. The best way to limit costs associated with a new hire is to refine your hiring process. Make sure that you’re investing in your team and creating an environment where your employees are engaged and appreciated — helping you avoid the loss of valuable employees.