"Having to hire a new employee is far out more expensive then investing in a good retention strategy" ... is that so ... time for some light weight math :-). Let's say an employee resigns, and there's now way back, what are the necessary steps in your exit process:
- Resignation letter ... damn
- Planning transition, informing client(s) & internal organization
- Exit interview (employee, you, HR, meeting minutes, ..)
- A bunch of administrative tasks need to take place ( stop extra benefits, health insurance, group insurance, company car, network access, ....
- Publish a new vacancy (advertisement or direct search)
- Interviews (mind the plural ... believe me one will not be enough)
- Introduction of the new employee
- Some administrative tasks to get the new employee registered
- Training & guidance during the first week(s)
- Last but not least we should not forget that during the first months this employee can never be as productive as the one that left your company
Several studies have tried to calculate the "new hire" cost, but you don't need to be a wiz kid to see that companies should better invest in trying to keep their good employees on board. Most studies talk about 30% to 50% of the annual salary cost of the employee that is resigning.
People are a valuable asset ... "the most important asset leaves the company every day", it's what we call human capital, we should make sure they come back the next day.
In one of the following posts I'll try to outline some tips on effective retention mgt.