This is one of those areas that would be amazing for academic study, but I doubt any company that would tell an interesting story would allow it. I would love for someone who had started with studies of tribes with an oral tradition to go into a software company and study how they work. I get the feeling that several similarities will show through even in a company that expects good documentation.
How much does employee turnover really cost?
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Re: How much does employee turnover really cost?
#52In 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.…
"Soon the world will turn completely on merit."
My money is on general AI and widespread sustainable fusion reactors before that happens. The crab mentality is strong, and those who can merely talk a good game will do their best to maintain the status quo.
Re: How much does employee turnover really cost?
#53> "Instead, focus on growth, impact, and care" Since a lot of tech companies employ young talent (relative to other industries), this video by Simon Sinek on "Millennials in the Workplace" can be enlightening: https://www.youtube.com/watch?v=hER0Qp6QJNU Forewarning, he goes off the deep end on a few points, but IMO the general ideas are valid.
Sinek relies on a healthy heaping of anecdotes and unfounded assertions to shake his fist at an ill-defined generation just like _every previous generation has done since the dawn of time_. O tempora! O mores! indeed.
Re: How much does employee turnover really cost?
#54There 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.
I agree with you -- I wrote this with regrettable turnover in mind. Parting ways with a low performer is definitely a valuable thing to do!
Re: How much does employee turnover really cost?
#55There 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.
> Not to mention replacing poor performers can often be a value gain not loss.
In the article's examples, I took the author's position as describing the situations concerning positive-value employees, not negative-value ones.
Re: How much does employee turnover really cost?
#56Two 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've been to management seminars where they downplay the importance of money, saying that employees are mostly motivated by other factors. Then I talk to my co-workers, the ones that are quitting, and about half of them leave because they've been working for 2+ years without a raise.
I worked at a company where a company decided to introduce a new management program (LEAN) into one department. That 16 person department saw 18 people leave during my 6 months at the company, and only three of the original team was there when I left. That is to say, five people started work after I showed up and left, before I quit to be a WFH dad.
And yet, nobody blamed the brass or the people implementing the LEAN program.
Re: How much does employee turnover really cost?
#57What are the ramifications if we learn that employee turnover is very cheap?
Re: How much does employee turnover really cost?
#58Two 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,…
HR is a fucked up profession with lots of weird thought processes.
Raises are subjective judgements, which are scary things. Word gets out that raises were given and everyone is looking for something. Also, HR often doesn't trust the managers. Is the manager rewarding good work? Or building an empire?
Incentives are always aligned with short term goals. If you give someone a raise, you're fucking up some KPI the HR guys cares about. If an employee quits and the company spends more, its either the former employee or the manager fault.
Re: How much does employee turnover really cost?
#59It's funny. The smart companies I know are all moving away from hiring full-time devs. They want a very small core team of highly skilled devs, all with relatively high equity, combined with tons of freelancers/consultants on a call-list.
By far the biggest cost to software companies is employee turnover because the second greatest cost is employee education and training. We've measured developer productivity in multiple ways and time to full productivity within any new team/project generally is 3-6 months. Average empployment time at any single company in the tech industry is now 18-24 months. It makes more sense to pay 3-4x for most work, rather than have to deal with HR, education, and retention overhead.
Re: How much does employee turnover really cost?
#60Two 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…
To your second point: I read claims like
Employees, Bersin explains, are appreciating assets that produce more and
more value to the organization over time, which helps explain why losing
them is so costly.
I think when you see the entire world ignoring your wisdom, you probably need to question the wisdom.