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How much does employee turnover really cost?

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Re: How much does employee turnover really cost?

#151

Post by rennir »

JamesBarney wrote: post #116
henrik_w wrote: post #32

Earlier quoted context omitted.

"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.

Yeah I just read their HR document yesterday and I really like how the company culture is described on paper.

Re: How much does employee turnover really cost?

#152

Post by strken »

beat wrote: post #123
phaus wrote: post #103

Earlier quoted context omitted.

Assuming you are correct, which I suspect you are, that means the group of people that aren't really motivated by money make up a tiny percentage of the work force. Therefore anyone running a business can safely disregard any idiot making the claim that money isn't a motivator, except on the rare occasions which they find themselves hiring executives that make north of $500k. For normal people, its infuriating to hea…

I was strongly influenced in my thinking by Jason Cohen's "Rich vs King" article, he talks about the S-curve of wealth utilization. Once you hit a few million in the bank, you have enough money to fund a reasonably lavish lifestyle, without working, for the rest of your life. At that point, how do you motivate someone?

There's a point where salary stops meaning increased consumption, and starts meaning increased control - not control in the narrow sense that "Rich vs King" discusses, but in the broader sense of being able to push your ideas.

Want to cure polio, go to Mars, put LED lighting in every home in Africa, fund research into fusion reactors, build flying cars, or push VR into the mainstream? You'd better have some cash.

Re: How much does employee turnover really cost?

#153

Post by sametmax »

beat wrote: post #85
_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…

Money doesn't motivate people past, oh, a half million or so a year, maybe.

You are confusing 2 meaning of motivations:

- the one meaning "the stuff that will get you involved"; - the one meaning "the stuff that you'll want to get".

The first one will drive you enthusiasm to work, your professionalism, the quality of what your produce and your loyalty. It's a "motor" kind of motivation, and money can't buy it. Only a sense of purpose can.

The second one is just bound to the reality of life : you need money for food, shelter, logistic, health, hobbies, then a growing family, and an evolving lifestyle. This will make you choose something. It's more a "motive" kind of motivation.

You can get a lot of people with only the second one. You can get some people for some time with only the first one. But to get the best, and for them to stay, you need a balance of both.

Re: How much does employee turnover really cost?

#154

Post by pixl97 »

farberjd wrote: post #14

It depends on a lot of factors including but not limited to: age of company, industry, how much tribal knowledge this person possesses and estimated ramp time. As an example: a 2 year old tech company, an employee that's been around since inception and possesses a lot of quirks and random information in their head, it's going to cost the company a shit load of money.

That's a business documentation problem. No different than if they get hit by a bus.

Re: How much does employee turnover really cost?

#155

Post by salarycommenter »

hfsktr wrote: post #124
salarycommenter wrote: post #24

Earlier quoted context omitted.

Another important aspect of compensation. When you negotiate compensation with new hire make sure to negotiate the salary you can retain them at not the lowest salary you can get them to leave for. At my current job I accepted knowing I was going to be leaving at 2 years on the dot. I told the manager hiring me this verbatim. For the first time when I leave a job I will be able to simply say "Well this is what you ag…

Why/How did you know you would be leaving after 2 years? Just the money or was there a specific reason? Sorry, just super curious.

It's just the money. For a 30% raise there isn't a job I would stay at. It's fine by me for a company to be just one more 2 year step on the ladder.

A bit of experience, a bit of pedigree, a bit of pay bump, and a good job while it lasts.

I'm not going to stop switching until people stop offering me 30% raises. Once equilibrium is reached I'll start evaluating them on merits, but the jobs that pay better have also been better in all dimensions. At least that was how it has gone during my career progression.

Re: How much does employee turnover really cost?

#156

Post by beachy »

georgeecollins wrote: post #67

Here is a strange thing I have seen: Turnover is bad for a company overall, but good for H.R. HR teams are more important the more there is a need for recruitment. I have seen them be the part of the company that says "we are a team like a sports team, not a family," implying churn is OK. That is good for their productivity, particularly if their workload is on boarding and "culture" as well as recruiting.

Turnover is not always bad by any means. Often a company accumulates (bad hires, acquisition, good apples going stale) people who would be better off gone for everyone's sake.

There's good turnover and bad turnover.

Re: How much does employee turnover really cost?

#157

Post by mooreds »

ptero wrote: post #39
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…

> It's a good idea to try to quantify the cost of losing an employee. Yes! But this is difficult. But beyond the easily computable costs (e.g., $x that the company spends on recruiting / total number of people recruited per year) there are significant costs that involve a lot of assumptions to quantify (e.g., effect of drop in team spirits). Those estimates often get discounted by bean counters exactly because they a…

At the least you can set a lower bound, right? And if that number causes you to quail, that should be food for thought.

Re: How much does employee turnover really cost?

#158

Post by mooreds »

thecardcheat wrote: post #96
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…

The article states: "Multiple studies show that while under-compensation can definitely contribute to employee churn, over-compensation won’t make up for a bad workplace." Does anybody have links to these studies? The under-compensation seems to be in wide agreement but I am curious as to what studies have been conducted that show that the preferred points (Growth, Impact, Care) are preferred over higher compensation…

http://www.ted.com/talks/dan_pink_on_motivation (I know it isn't a study, but this was the one video I remember mentioning that more money doesn't equal more motivation)

Re: How much does employee turnover really cost?

#159

Post by beachy »

Aqua_Geek wrote: post #73
mevile wrote: post #40

Earlier quoted context omitted.

In my experience, this is not true in San Francisco. I've never worked anywhere in the bay area where engineers were thought of as easily replaceable. Everyone knows how hard it is to hire competent engineers around here. Even if people were lined up to replace a lost employee, just the interview process for hiring people is expensive as it takes multiple people out of their role to sit and interview someone for a da…

> I've never worked anywhere in the bay area where engineers were thought of as easily replaceable. They may not have been thought of that way, but I've very much seen them treated that way.

People are humans and human nature nearly always leads to political behaviour (i.e. behaviour not optimal for the organization as a whole) in any organization of more than a few people.

Pressed on all sides, dealing with unreasonable demands from above, and with internal competitors and naysayers to fight off, even the most enlightened manager may sometimes behave in ways that treat people as easily replaceable.

Even if intellectually they know they aren't.

Re: How much does employee turnover really cost?

#160

Post by startupsco »

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

It does seem cool, but for some reason, I feel like the tone is Big Brother-esque. "Imagine if..."
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