How much does employee turnover really cost? • Hacker News Board

Re: How much does employee turnover really cost?

#41

Post by mildbow » Tue, Jan 17, 2017, 7:00 PM UTC

Buttons840 wrote: post #30

dtnewman wrote: post #16

Two thoughts: * It's a good idea to try to quantify the cost of losing an employee. If you at least understand what basic costs you'll incur, such as cost of hiring, training, etc. it'll give you a basis for realizing the importance of minimizing turnover (perhaps you'll even conclude that turnover isn't a big deal in your case). But it's very hard to quantify some of the largest costs such as employee moral. I was o…

I would guess it's common for a team to be in a disfunction environment but stick together for the sake of the team and friendships. Once one person leaves though, everyone then leaves in succession. I'm in that position now. If a PM who I highly respect leaves I'll probably leave as well because I wouldn't want to deal with the stuff he protects us from. I also wouldn't want to abandon this guy, so I probably won't…

I've been through this once and it was enough for me.

In retrospect, I should have left way earlier. I urge you to consider whether, by staying, you are just enabling the sort of disfunction you dislike :)

Camaraderie is great and if there is actual friendship/respect then the relationship will continue even after you quit.

Re: How much does employee turnover really cost?

#42

Post by krapp » Tue, Jan 17, 2017, 7:06 PM UTC

vinceguidry wrote: post #31

In my studies of history, I'm finding this current thrust of individuals as stores of wealth over firms and nations to be quite interesting. Back in the colonial period, everything revolved around national wealth. The crown alone sanctioned and funded expeditions, chartered corporations, and fought wars. Over the last few centuries, power gradually shifted to the firm, then to markets, and now finally to individuals.…

>Now, all you need is intelligence and mental fluidity to weather hardships. No longer is a job loss catastrophic. Just about anyone born in a Western nation can, if he decides to, gain an education and make his way up the social ladder.

What Western nation do you live in?

Because in the Western nation I live in, both job loss and education can be catastrophic for many people.

Re: How much does employee turnover really cost?

#43

Post by burkaman » Tue, Jan 17, 2017, 7:06 PM UTC

vinceguidry wrote: post #31

In my studies of history, I'm finding this current thrust of individuals as stores of wealth over firms and nations to be quite interesting. Back in the colonial period, everything revolved around national wealth. The crown alone sanctioned and funded expeditions, chartered corporations, and fought wars. Over the last few centuries, power gradually shifted to the firm, then to markets, and now finally to individuals.…

> Now, all you need is intelligence and mental fluidity to weather hardships. No longer is a job loss catastrophic. Just about anyone born in a Western nation can, if he decides to, gain an education and make his way up the social ladder.

This still only applies to people who have picked the right parents and the right industry.

I get that the historical trend is toward social mobility and equality, but "all you have to do is decide to succeed" is still an idealistic cliche, and probably always will be.

Re: How much does employee turnover really cost?

#44

Post by draw_down » Tue, Jan 17, 2017, 7:07 PM UTC

Balgair wrote: post #25

dtnewman wrote: post #16

Two thoughts: * It's a good idea to try to quantify the cost of losing an employee. If you at least understand what basic costs you'll incur, such as cost of hiring, training, etc. it'll give you a basis for realizing the importance of minimizing turnover (perhaps you'll even conclude that turnover isn't a big deal in your case). But it's very hard to quantify some of the largest costs such as employee moral. I was o…

On 2: Ok all, why do diagonal promotions occur? I understand the issues around promoting when there is no room in the org chart, but I don't understand the issues with pay. Employees will shop the resume around, that is expected these days. And as the article points out, there are massive costs to a firm when those good employees up and leave. So why not just give a raise? Maybe you don't have the budget, I get that,…

Most companies are run in a very short-sighted manner, I think that's kinda all there is to it.

Re: How much does employee turnover really cost?

#45

Post by makecheck » Tue, Jan 17, 2017, 7:08 PM UTC

Software development has some “special” traits that are not necessarily covered by this analysis.

For one thing, you can’t just measure what a developer has done; you need some sense of how easy maintenance is going to be. Given two brilliant solutions that required an extraordinary developer to create, one may be an indecipherable mess and the other may have been built in a way that makes typical maintenance tasks very straightforward. From the outside they may look the same but the cost difference is huge.

Some people are really good at writing solid code, and replacing them may mean introducing headaches that you didn’t have before. Also, a particularly weird bug may cost your team tremendous amounts of time (and possibly more), and you may not have the right people to deal with that quickly.

Also, “cost of hiring” probably isn’t referring to the cost of having a really bad hiring staff. If those people are not doing a good job of filtering résumés or otherwise finding the right people, or if they leave good candidates dying on the vine due to slow response times, there is a big cost. It is extremely important for companies to look good from the outside to attract candidates.

Re: How much does employee turnover really cost?

#46

Post by ChuckMcM » Tue, Jan 17, 2017, 7:08 PM UTC

The article goes out of its way to mention 'regrettable employee turnover' which is a polite way to identify the group "people who left you wanted to stay" vs "people who left and you are happy with it." However, that requires that you also understand the impact of an employee on the organization.

There are people who have been "let go" because their manager had no idea what they actually did, and that caused a huge impact on the organization overall. There are people who have been "retained" because their manager felt they were key to the success of the group/project but didn't realize the toxic impact they were having on the organization.

These are the "inverted" cases where you really need to keep the person having high impact and manage out or move the person who is creating stress on the rest of the team.

Re: How much does employee turnover really cost?

#47

Post by kornish » Tue, Jan 17, 2017, 7:11 PM UTC

vermontdevil wrote: post #9

Not hard to see the obvious. Look at Costco compared with Sam's Club. You can see the difference since Costco employees tend to stay longer there. https://hbr.org/2006/12/the-high-cost-of-low-wages

Another example in this vein is Henry Ford's $5 work day – wages dramatically above then-market rates prompted outrageous enthusiasm and loyalty from workers.

http://www.henryford150.com/5-a-day/

Re: How much does employee turnover really cost?

#48

Post by HarryHirsch » Tue, Jan 17, 2017, 7:16 PM UTC

vinceguidry wrote: post #31

In my studies of history, I'm finding this current thrust of individuals as stores of wealth over firms and nations to be quite interesting. Back in the colonial period, everything revolved around national wealth. The crown alone sanctioned and funded expeditions, chartered corporations, and fought wars. Over the last few centuries, power gradually shifted to the firm, then to markets, and now finally to individuals.…

intelligence and mental fluidity to weather hardships

You weather hardships with money. What's with this four-minute-man talk?

Re: How much does employee turnover really cost?

#49

Post by mtkd » Tue, Jan 17, 2017, 7:16 PM UTC

employee turnover is why enterprises rarely build any useful software and have to buy startups to more forward

projects or operations with fragmented continuity because of turnover contribute near zero additional value and existing value decays quickly over time - each time a role is replaced more knowledge is lost - to the point the project is permanently on life support

paying people more and more to stay isn't enough - you also have to remove all the oxygen stealing layers of bureaucracy to create a bearable working environment - but that isn't usually possible in an enterprise as everyone senior tries to avoid being responsible for anything which almost always leads to more management and compliance layers until someone soils the bed over cost

I take my hat off to Microsoft over the last couple of years - what those guys (Scott Guthrie?) have done with .NET, SQL etc. appears, from the outside, to have reversed that trend

Re: How much does employee turnover really cost?

#50

Post by dpweb » Tue, Jan 17, 2017, 7:17 PM UTC

There should be some further study in this area. I'm skeptical of the quoted costs of replacing employees and missed productivity ie.. 213%. Not to mention replacing poor performers can often be a value gain not loss. About cost, we're talking managers' time - but maybe hiring is most valuable thing they can be spending time on, other than directly generating revenue.