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How much does employee turnover really cost?

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Re: How much does employee turnover really cost?

#111

Post by weaksauce »

paulddraper wrote: post #105
jventura wrote: post #100

Earlier quoted context omitted.

On my last job I had made a verbal deal with the previous CTO in which I would be raised in 6 months time after being hired. So after 6/7 months, I went to negotiate a raise with one of the owners and the product manager. I said explicitely that I was quite below market rate and would consider only a raise of at least 20%. The result? I was offered 2%-3%, to be discussed on the next annual review (still some months t…

> I had made a verbal deal with the previous CTO in which I would be raised in 6 months time after being hired > My conclusion: never accept verbal agreements again. Was the verbal agreement not honored? 2-3% after 6 months is not nothing. It seems your problem was accepted an offer 20% below what you should.

No. Verbal was 6 months: give raise.

Actual was at 6/7 month be told that contingent on performance you would get a raise of 2-3% at 12 months.

Being 20% lower than market rate is definitely the problem and a signal that they don't want to pay appropriately.

Edit: if you don't value your worth appropriately from the get go, why would the employer?

Re: How much does employee turnover really cost?

#112

Post by tyingq »

draw_down wrote: post #44
Balgair wrote: post #25

Earlier quoted context omitted.

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.

I do see that a lot. I see it on the other side too, however. Employees that jump ship without doing the right research, and finding out the raise wasn't really worth it, for various reasons.

Re: How much does employee turnover really cost?

#113

Post by bsder »

battlebot wrote: post #94
_yosefk wrote: post #75

Earlier quoted context omitted.

I'm guessing few would book a management consultant simply telling to pay people more money - consultants who want a job instead have to explain how to motivate for free. But the people who share a lot of the blame for this idiocy and who have no good excuse are "heterodox economists" and TED talk presenters telling us how money doesn't motivate people past a certain point, or how it actually makes people less creati…

And yet isn't it just slightly odd how software consulting rates were the same 17 years ago as they are now? And there was all that inflation in the interim...hmmm...

Funny, the rates for folks on embedded just keep going up ...

Re: How much does employee turnover really cost?

#114

Post by omouse »

battlebot wrote: post #94
_yosefk wrote: post #75

Earlier quoted context omitted.

I'm guessing few would book a management consultant simply telling to pay people more money - consultants who want a job instead have to explain how to motivate for free. But the people who share a lot of the blame for this idiocy and who have no good excuse are "heterodox economists" and TED talk presenters telling us how money doesn't motivate people past a certain point, or how it actually makes people less creati…

And yet isn't it just slightly odd how software consulting rates were the same 17 years ago as they are now? And there was all that inflation in the interim...hmmm...

as the other reply said, supply has increased non-linearly while the number of companies has increased linearly. Even with all the companies out there, you're getting lots of mergers and acquisitions and consolidation.

In terms of consulting, credit/loans are harder to get for smaller businesses and most software ends up being targeted toward large businesses, and so do most consultants.

It's harder to be a small business than to be a large business; therefore it's hard to pay more and since you're already as efficient as possible it's harder to get those rates up.

(Also there was wage suppression by Google and Apple and other big companies for around 5 years, that's a HUGE damper on the maximum salary which also translates into a damper on consulting rates.)

Re: How much does employee turnover really cost?

#115

Post by enraged_camel »

paulddraper wrote: post #105
jventura wrote: post #100

Earlier quoted context omitted.

On my last job I had made a verbal deal with the previous CTO in which I would be raised in 6 months time after being hired. So after 6/7 months, I went to negotiate a raise with one of the owners and the product manager. I said explicitely that I was quite below market rate and would consider only a raise of at least 20%. The result? I was offered 2%-3%, to be discussed on the next annual review (still some months t…

> I had made a verbal deal with the previous CTO in which I would be raised in 6 months time after being hired > My conclusion: never accept verbal agreements again. Was the verbal agreement not honored? 2-3% after 6 months is not nothing. It seems your problem was accepted an offer 20% below what you should.

>>It seems your problem was accepting an offer 20% below what you should.

Yes, that was indeed his mistake.

And so was expecting a 20% raise six months after being hired. That is, frankly, a ridiculous proposition.

Re: How much does employee turnover really cost?

#116

Post by JamesBarney »

henrik_w wrote: post #32
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…

"By the time it gets to a counter-offer stage, it's often too late." - so true! Also made me think of the Netflix HR/culture document [1] - pay the max you would be counter-offering for an employee right off the bat, don't wait unitl you actually have to give a counter offer (which would probably be too late anyway) [1] http://www.slideshare.net/reed2001/culture-1798664

This is the best candidate ad I've ever seen. This makes me really want to work at Netflix.

Re: How much does employee turnover really cost?

#117

Post by omouse »

jcadam wrote: post #82
jedrek wrote: post #56

Earlier quoted context omitted.

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 departme…

My last job gave me a ~2% raise the first year and a ~1% the next. I left shortly thereafter. Should have left after the first lousy raise. The previous job gave me back-to-back 1% raises. Left that job after two years as well. Should have left at the one year mark. I've been in my current job a few months. I'll stick around till the first annual raise cycle to see how they treat me. I don't think I'll give this empl…

It's funny to be in this situation where interest rates are low, and returns on investment are usually low (at least for consumer accessible investment vehicles), but then businesses and the owners/executives are making bank.

Re: How much does employee turnover really cost?

#118

Post by HarryHirsch »

protomyth wrote: post #81
HarryHirsch wrote: post #72

Earlier quoted context omitted.

Karen Ho went to Wall Street for her dissertation: https://www.amazon.com/-/dp/0822345994 Anthropologists don't commonly live in mud huts, that's just a prejudice.

> Anthropologists don't commonly live in mud huts, that's just a prejudice. Where the heck did that come from. I'm well aware of cultural anthropology and have worked with a couple on academic grants. I just think those more familiar with oral tradition of tribes would have an amazing time in a software company. Also, just for your information, not all tribes live in mud huts, that's just a prejudice.

The mud hut was intended as a sideswipe at the fairly large HN faction that believes that only the hard sciences are a worthwhile pursuit and that the arts and humanities are for penniless losers. Also, Nigel Barley's Notes from a Mud Hut. (Yes, now I realize how the previous comment can be misunderstood, sardonic groans don't translate into written text.)

Re: How much does employee turnover really cost?

#119

Post by omouse »

shanemhansen wrote: post #61

I've often been shocked at how a theoretically rational profit seeking business will happily throw millions down the drain rather than compensate an individual based on value. Ultimately I've concluded that although they may be greedy, most businesses don't make rational profit seeking decisions. They make decisions that stroke their ego, and sometimes their ego can't accept the value that certain employees bring to…

It's about power, the sooner you understand that, the sooner you can negotiate better terms.

And yes, they are just coders. Coders are bad at negotiating, they're bad at politics, they're missing out on earning ALL of their labor.

Re: How much does employee turnover really cost?

#120

Post by Axiverse »

I wonder if taking such a view can be short-sighted. While it is true that employee turn-over can be costly, perhaps that is also one of the ingredients that make tech successful. The valuable employees that you hire have gained their skills at a number of other companies and the employees that have left are contributing to other companies. While this isn't on your balance sheet, it is contributing to the tech community as well. I wonder how you would go about quantifying this.

From my experiences, those in tech for the most part have come from the tech community and stayed in the tech community. Employee mobility is creates a mixture of ideas and also lets individuals to be trained in certain disciplines by those that are most capable at it. In return, companies get employees that were well trained by other companies thus increasing the value of tech companies as a whole. I wonder if this becomes a trend and companies try to close their borders tighter (somewhat reminiscent of U.S. politics right now, huh?) that companies will see short term gains, while the entire industry would suffer in the long run.

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