The Cost of Turnover: Five Tips to Help You

The cost of turnover in a business is one of the most difficult concepts for small business owners. Instead many small business owner’s get frustrated re-hiring another new person, and continue losing employees, like a revolving door.

In this post, I will talk about what happens and offer some data essentials to help you better understand the work that should be done, up-front.

When you are ready to hire another employee because your workload is heavy, or you are trying to grow your business, you should consider Step #1 – Hiring an HR Consultant or Staffing Agency to help you. When you fail step #1, you miss out on the expertise involved in the hard and soft costs, including taking time away from your business. How could you possibly do that?

Let’s think about the hard costs such as a well thought out job description; determining the best places to find good candidates; where to post your job? Thoughts about pre-employment services (alcohol and drug testing); and reference and credential checks are imperative.

Step #2, when you start the hiring process you will need to establish five good behavioral interview questions. You should ask each prospect the same questions to obtain the correct answers. Step #3, do you have a job application or will you be accepting resumes only? While you are taking each one of these steps, you are facing soft costs caused by the lost productivity, increased workloads, and retraining time, which all impact your business. Step #4, you must evaluate your answers from all prospects.

The cost of turnover is a lot more than just finding a person in this tight job market. It is about the approach, the skill to drive the process efficiently, and effectively, to the offer stage, and onboarding process. In my experience most small businesses cut out most of these steps impacting the cost of turnover multiple times.

Step #5, Be Smart! Engage professional assistance to reduce your overall costs. Put more money in your pocket! In another post I will talk about retaining employees. Stay tuned.

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