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How much does employee turnover really cost?

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Re: How much does employee turnover really cost?

#281

Earlier quoted context omitted.

> Average empployment time at any single company in the tech industry is now 18-24 months. The devs who are ok with this have no idea how bad this will bite them later when they're older and nobody wants to employ them. Hope y'all are good at saving money.

Maybe it will hurt them, but it may not as well. Tech, for better or worse, is moving so fast that working on the same codebase for 5+ years is likely to greatly reduce your marketability for a new job. While that loyal individual may have been very valuable to his former employer, much of what he learned/specialized in is specific to that company and provides little value to someone else. One can always blame the in…

It really astounds me when I see resumes for people who spend 6-12 months at a job before moving on. Sure, where it's contracts, that's often out of the individuals hands and I pay no attention to the duration.

A remarkable number of these are people who have taken full time jobs and moved on soon after. The only thing that results in is the resume going in the trash.

Re: How much does employee turnover really cost?

#282
post #75
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…

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…

There's a fairly clear misunderstanding here. I think it's absolutely true to say that money doesn't motivate people. For most people, giving them raises won't make them work harder, stay longer, be more creative, etc. - at least, not long term. And if there are problems making them unhappy, throwing money at them isn't going to help much long term either.

But if you're underpaying people or not giving raises, people quickly become unhappy and will either slack off or eventually leave - that's the 'certain point'! You absolutely need to keep giving good raises to keep good people there - but for most people it will just maintain their performance, not to motivate them to be better.

Re: How much does employee turnover really cost?

#283
post #136

Earlier quoted context omitted.

I make low 6 figures doing network security. If I hit 200k, literally the only thing you could do to motivate me would be to treat me well and give me interesting things to do. Fortunately, my employer already does both of those. I just wish it wasn't almost a requirement to leave in order to get a decent raise. Note: I'm not expecting to make $200k in a technical role as a security analyst any time soon, its just hy…

Would you now take 200k job but kind of okay project not very interesting? That is what we are talking. BTW, You can make 200k soon depending on how good you are in the security domain

The situation I'm in now is that I'm very good at several aspects of security, but I'm not an rock-star at any of them (although in many ways I feel just a step or two away). In a way, being a jack-of-all trades is very useful for my current role, which involves a lot of incident response type things: network forensics, host-based malware forensics, log analysis, etc. I get great performance reviews in a company full of talent, but its hard to accurately assess yourself (and like many I struggle with impostor syndrome). This year, I'm focusing on getting better at programming and going beyond the basic aspects of reverse engineering. Basically, I'm trying to find a path to specialization in order to progress. I could probably easily land a job making ~50k more than I do now, but I'm planning on attempting to negotiate for a decent raise the next time I get promoted. I like everything else about the company,so if we could come to some kind of an acceptable situation I would love to stay.

However, if someone offered me $200k today for a full-time position at a private company, I would almost certainly accept. I can deal with less than ideal or even boring work as long as there's a good work/life balance that lets me keep working on projects at home. And even if the work isn't glamorous, I'm the type of person that enjoys all kinds of work, physical or mental. Before I got into security I did everything from shovel half-rotten fish into buckets for a living to running network cable. As a caveat, if its a government/contracting job, it would probably have to be $300k (which is probably unrealistic). There are aspects of government work that are interesting, but from my experience the negatives almost always outweigh the positives.

Re: How much does employee turnover really cost?

#284
post #47

Earlier quoted context omitted.

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/

There's a lot more to it than that. >The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees' homes to ensure that they were doing things the "American way." They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily…

I didn't know that – thanks for sharing!

Re: How much does employee turnover really cost?

#285
post #56

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'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…

It seems to me that the money question confounds two factors. As I recall (possibly incorrectly), studies find that increased pay doesn't correlate with increased work / productivity. That's probably true. If I'm working on a problem that I want to be working on, it would take relatively large swings in pay to motivate me to work more or less hard than I otherwise would.

And yet I'd bet that money does have a significant correlation with retention and satisfaction. Perception of insufficient raises will certainly lead to dissatisfaction. Offer of meaningfully more money at a different job --> who wouldn't want that if the work is otherwise as good?

So in other words, productivity != retention.

Re: How much does employee turnover really cost?

#286
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…

There's a fairly clear misunderstanding here. I think it's absolutely true to say that money doesn't motivate people. For most people, giving them raises won't make them work harder, stay longer, be more creative, etc. - at least, not long term. And if there are problems making them unhappy, throwing money at them isn't going to help much long term either. But if you're underpaying people or not giving raises, people…

I usually interpret being underpaid as, "The company doesn't care about me." When the company doesn't care about me, I start looking elsewhere.

Re: How much does employee turnover really cost?

#287

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…

> Average empployment time at any single company in the tech industry is now 18-24 months. The devs who are ok with this have no idea how bad this will bite them later when they're older and nobody wants to employ them. Hope y'all are good at saving money.

I think it's a different generation. Companies don't invest in people, people don't stay long term in companies. You can also get big pay jumps early in your career - spending 2+ years in your first company is just pouring money down the drain.

I'm kind of in this position. My first job out of university was a 3 month contract, then I had a 9 month "permanent" position which ended when they closed the office, then two back to back contracts at the same place spanning 12 months, and now another permanent position which I am 6 months into. Before this most recent position I had the most interest of potential employers to date.

I suspect you are right in one sense - as you get further into your career the length of time you stay in positions should be longer, or you should move into contracting. I certainly plan on staying at my current position for at least 24 months. But I feel like 5 and 10 year tenures will start to be the exception rather than the norm.

Re: How much does employee turnover really cost?

#288

Earlier quoted context omitted.

How does that help someone who has been there for 2,3,4,5 years, since they created that.

Well, it might help their job security (no one else knows how it runs).

There was a guy who tried that, he wrote code so bad that no one else could understand it. In the end, the company fired him and hired someone else to rewrite his code from scratch. It's not worth it, just write good code.

Re: How much does employee turnover really cost?

#289

Managers, here me now. 1) Money is a factor because my job is difficult. 2) Up to date technology is important because I want to build interesting products. As a developer, these are my motivations.

Money I'll give you, but the vast majority of software is not going to be "interesting" or progressive. There are tons of major corporations doing "boring" work.

Money works perfectly fine as compensation for boring work :)

Re: How much does employee turnover really cost?

#290
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…

There's a fairly clear misunderstanding here. I think it's absolutely true to say that money doesn't motivate people. For most people, giving them raises won't make them work harder, stay longer, be more creative, etc. - at least, not long term. And if there are problems making them unhappy, throwing money at them isn't going to help much long term either. But if you're underpaying people or not giving raises, people…

Exactly. Money (as a carrot) like most tangible benefits (free lunch/drinks, foosball tables) won't motivate people for long. Weeks at most.

However, the lack of money (or other tangible benefits) that people feel owed is a huge motivation for those people to leave.

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