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How much does employee turnover really cost?

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Re: How much does employee turnover really cost?

#271

Post by dmourati »

tlogan wrote: post #182
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 problem with salary and market rate is that the current rule is: in order to get a raise you need to change jobs. In many companies (I worked in one) you need to get CEO approval to give somebody raise more than 5% ("CEO approval" means - no way). But there was a trick: you can re-hire valuable employees after a year with 20% to 50% increase in salary. And they will not even lose 401k matching or other benefits t…

Not sure what you mean by rule but that has not been my experience. I'm unsure how up the ladder my raises have been but I've gotten 16%, 18% in the past year and half.

Maybe CEO approval just means the company is belt-tightening.

Re: How much does employee turnover really cost?

#272

Post by NegativeK »

EpicEng wrote: post #243
jventura wrote: post #215

Earlier quoted context omitted.

The agreement with the CTO was to have a raise after 6 months. There was no previous agreement of a specific number, just a "raise". After 6/7 months I went to talk to one of the founders about that specific issue, i.e. that I was promised a raise, and that I wasn't expecting anything below 20%. I came to know during the time that I work there that was being paid well below my coworkers (and the market rate in genera…

Expecting a 20% raise after six months is ludicrous.

Expecting employees to stick around when they find out they're 20% behind peers is also ludicrous.

I can't imagine the majority of managers fixing it and I can't imagine an employee doing anything other than finding a new job. Everyone loses this one.

Re: How much does employee turnover really cost?

#273

Post by obstinate »

jimbokun wrote: post #254
obstinate wrote: post #225

Earlier quoted context omitted.

I used to think that, but now I make $500k and I think you could convince me to work on something I like slightly less well for $700k. Once I achieve financial independence, it will be different, but until then, changes that significantly impact the distance to that goal are motivating. The interesting thing though is that you wouldn't really want to entice me that way, because I'd guess you'd get a worse product out…

If you're making $500k and not financially independent, or about to be very soon, you are doing something wrong, I think.

Soon. But sooner is better.

Re: How much does employee turnover really cost?

#274

Post by aprdm »

bsder wrote: post #113
battlebot wrote: post #94

Earlier quoted context omitted.

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 ...

+1 anecdote, had 4 years as embedded systems engineer, quit to be a junior django dev making way more. If there's one fucked up industry that's called Embedded systems :D

Re: How much does employee turnover really cost?

#275

Post by ajmurmann »

megablast wrote: post #216
willhslade wrote: post #199

Earlier quoted context omitted.

Germany, Japan, and the UK. Managers not MBAs is a good book that summarizes the problems with the current management culture. Basically, by having a class of people who have never done the grunt work of a particular job, you ruin what the Army calls "Unit Cohesion".

Sure, Japan. Where you work 6 days a week and don't leave before the boss does, at 10pm. The UK was no different to the US.

Maybe there are things one could learn from Japanese managers other than the work hours?

Re: How much does employee turnover really cost?

#276

Post by camelNotation »

burkaman wrote: post #181
bubblesocks wrote: post #135

Earlier quoted context omitted.

Exactly! I switched careers by doing nothing more than studying in my local library, and then applying for jobs once I felt I was ready to interview.

Now imagine you work two jobs to pay for food and shelter, you don't have a car or a library within walking distance, you couldn't afford any education beyond high school, and employers are statistically much more likely to ignore your resume because your name sounds black.

I admit that this sort of individual is particularly hard hit. There are programs that can help with different aspects of that situation, but no guarantee all will work with enough synchronicity to facilitate a full college education. That said, people who have it that rough also have nothing to lose. That's exactly the sort of person who could tolerate temporary homelessness if it means a better future. If the baseline goal is to improve their financial station, they should be going after trade skills, not full college. Trade skills could get them a stable career, a car, and solid resume. After that, they can consider going further, but there is definitely a path.

Re: How much does employee turnover really cost?

#277

Post by tedmiston »

qaq wrote: post #79
Inthenameofmine wrote: post #59

It'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 mult…

Do freelancers/consultants magically need no onboarding and become fully productive on day 1?

As a dev employee turned freelancer, the onboarding is still there but much different. Much more focused on learning just enough to work on specific tasks vs poking around for a week or two and figuring out the whole system. I'd say I spend 1/4 the time onboarding as a contractor vs as an employee.

Re: How much does employee turnover really cost?

#278

Post by camelNotation »

CPLX wrote: post #98
camelNotation wrote: post #91

Earlier quoted context omitted.

If it's catastrophic, you're probably not taking advantage of the resources available. I know many people who feel pigeon-holed or trapped simply because they are unaware of how insanely easy it is to drop what you're doing, go to school, and get hired elsewhere. There are so many resources and options out there if you're willing to weather the change. Most people are just too scared to consider it and they misinterp…

> I know many people who feel pigeon-holed or trapped simply because they are unaware of how insanely easy it is to drop what you're doing, go to school, and get hired elsewhere. There's quite a few people that you don't know then. The median personal income in the US is $30,240 for all workers over age 15 with income. That means half of all working people in the US have less than $30k a year in income. What percenta…

I made about 22,000 a year when I quit my full time job in retail, went back to school, and now I make far more. It's hard being poor, but much of the struggle is brought on by a lack of awareness. I know this because a huge portion of my sample were people that worked alongside me. There is a lot out there to help people get from the bottom up, they just have to look for it in the right places. With an income as low as mine, I paid essentially nothing for college and qualified for all sorts of assistance and tax breaks. It can be done, you just have to be willing to work hard at it and get the help that's already there.

Re: How much does employee turnover really cost?

#279

Post by brownbat »

jimbokun wrote: post #258
at-fates-hands wrote: post #188

Earlier quoted context omitted.

To your point, I remember 50cent (the rapper) talking shortly after he made $400 million on his Vitamin water investment. He said he ran into some Coca-Cola executives after they purchased the company and he was sort of crowing about all the money they had just made him. I guess two of the executives were like, "Huh, $400 million, not a bad start Curtis. Let us know once you get in the $800 million or even the billio…

Meh, he could have replied "let me know when you have a stadium full of people screaming your name."

Hmm, at first I thought: If you have a billion dollars you can get 50,000 people in a stadium screaming your name. I mean, you could get me to scream your name for $20k easy, and I don't even like stadiums that much.

But, ok, that's a fairly prohibitive expense. Musicians can get that and have the audience pay for the privilege. They can do so repeatedly, which certainly qualifies as some kind of asset.

So call it a type of capital, a social capital, maybe... ability to muster crowds?

It would be interesting to see a graph of how much "muster" varies across a given population.

Follows Zipf's Law like everything else, I'd wager. Most people would have to buy an audience. A tiny few can get audiences to pay. There's a growing middle-class sitting at the zero-pivot--emerging indie bands and popular academics--they pull in audiences, but only for free.

Once we formalize all that we'll of course need some sort of exchange rate for muster, USD:MST, before we can get down to the important work of comparing the relative capital of a superstar and the super-rich.

Take note young econ grad students: the to-be-written papers on the liquidity of muster are the stuff careers are made of!

Re: How much does employee turnover really cost?

#280

Post by grigjd3 »

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 just left a job that was paying about 85% of the current market for an offer way above the market. However, if I had been at or just above the market average, I would not have gone looking.
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