The cost of replacing an employee is, on average, 1.5 times higher than the cost of training a new team member (GALLUP). By hiring someone new, you often increase your wage bill, and also incur the cost of training, onboarding and waiting for them to reach full productivity. This is additional time, resources and thus cost. Not to mention, the hidden costs of lost institutional knowledge, disruption to team dynamics, and the impact on company culture. Instead of constantly cycling through talent, why not focus on retention? Invest in your current team’s growth, development and make sure that you keep their wages up to market for their level. Not only will it save your startup cash in the long run, but it will also create a more engaged and motivated team. Doing so is a direct investment in the success of your business. #startup #founders #peopleops #scaleup #culture #peoplefirst #peoplestrategy
Investing in retention cultivates success. Simple. Wise words Steph Thommen
Absolutely spot on! 1. Investing in your team’s growth can lead to higher retention and job satisfaction. 2. Continuous development helps keep skills sharp and employees engaged. 3. Competitive wages and opportunities for advancement create a loyal and motivated workforce. 4. The hidden costs of turnover—like lost knowledge and disrupted team dynamics—are often overlooked but significant.
So true I see not just the financial cost but the knock on human costs for the team as they: cover the leavers work, feel demoralized while the listen to all the great stuff happen for the person that left and prop up the new joiner while they learn the job. Quitting can be contagious!
This is particularly true when someone has been through a hard time. So many people feel unsupported or under too much pressure from managers and employres, and so leave completely. A little more awareness and flexibility can keep people in their roles and ultimately develop, rather then starting again from scratch.
🛠️ Building AI solutions for enterprise
7moI'm actually surprised that Gallup rates it so low. In my line of work, and especially in more niche lines of work or where experience is required, it's much, MUCH worse. 1) employee leaves... that's a lose of billable hours until they're replaced on project 2) recruiters can charge anything up to 6 months of the first year salary as a finders fee 3) any opened position, must be at the 90th percentile of the market - otherwise you're not going to attract the best 4) ramp up time, especially in consulting, you'll spend 6 months training them up on soft skills and consulting quirks before they are 100% of a replacement 5) all the taxes + benefits you're paying whilst they ramp The problem is that "we need $X to get this guy to sign" is a tangible need. "We should give this guy 5% to make sure they're not taking recruiter calls" is an intangible, gut feel.