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How much does employee turnover really cost?

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Re: How much does employee turnover really cost?

#181

Post by burkaman »

bubblesocks wrote: post #135
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…

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.

Re: How much does employee turnover really cost?

#182

Post by tlogan »

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 they have accumulated.

And system seems to work well: re-hired employee would be much more experienced and they came back like nothing happen.

So I do not know...

Re: How much does employee turnover really cost?

#183

Post by st3v3r »

beat wrote: post #128
_yosefk wrote: post #92

Earlier quoted context omitted.

What also amazes me is that the same heterodox crowd critiquing capitalism goes on to say "money doesn't make you happy", citing surveys of millionaires and billionaires who all say they'd be happy with 2x-3x their current net worth! I mean, not necessarily the same people say it, but the same press outlets for sure. But if it doesn't make you happy and you always want more, that desire must motivate you, right? Make…

Talk to some serial entrepreneurs. Many of them are already rich, and don't need to work, but they do it anyway. They're motivated by the challenge, not the money.

I'm sure, but the money definitely helps. If only because it enables them to do what they do.

Re: How much does employee turnover really cost?

#184

Post by jackaltman »

jack9 wrote: post #175

Notice the article starts by talking about the mythical "superstar" instead of the more common "sub-performer" or "redundancy". Employee turnover FUD is all over, when existing dysfunction is ignored. I interview and hire in 3 days. I run through tens (if not hundreds) of interviews and the commensurately large resume pool. 1-2 hours every day, is barely a chore for the ability to hire someone smart and interesting t…

I agree completely with this. I was writing about turnover of high performing employees, which is crazy expensive. Turning over low performers is valuable and important for companies to do.

Re: How much does employee turnover really cost?

#185

Post by st3v3r »

milliondollar wrote: post #134
enraged_camel wrote: post #110

Earlier quoted context omitted.

Yes it does, actually. Not because it leads to any noticeable quality of life improvement, but because at those levels it becomes a pissing contest with other high-earners. Some rich people care a LOT about making more than other rich people in their social/work circle.

Yes but if you have the intestinal fortitude to check out of those pissing contests you can really create your own life. That is, if you are lucky enough to be at level to start. I did note that many of my peers where COMPLETELY freaked out by my decision that I mentioned above. My choice to step back from the game freaked them out. No over aggression but a mix of outright confusion as well as somewhat confused jealo…

At the same time, it still sounds like you're making a huge ton of money. More than most of us.

Re: How much does employee turnover really cost?

#186

Post by jackaltman »

euphoria83 wrote: post #29

This article missed the fact that the cost to the company in trying to keep the employees who will leave every year might be greater than the cost of losing them. For e.g., in the example given in the article, the company loses 1.57 million due to employee turnover. However, who knows how much the company might have to spend to keep those employees from leaving. The cost would be high because the effort spent on empl…

That's a valid point, that it could potentially be more expensive than it's worth. In other words, it is possible to spend too much on trying to make your employees happier.

I wasn't trying to argue that the optimal amount to spend on employee turnover is infinite, but I do think most companies dedicate less than the rational/optimal amount of effort on it.

Re: How much does employee turnover really cost?

#187

Post by _yosefk »

milliondollar wrote: post #121
beat wrote: post #85

Earlier quoted context omitted.

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

Exactly yes. I used to make over a million a year as a big 3 partner in management consulting. I dialed back to half time and am UNBELIEVABLY happy!

Having dialed back to 3 days/week, I believe that "how much time I'm willing to spend working" is a somewhat orthogonal question to "what motivates me during the time when I'm working." Not entirely orthogonal but also very far from the same question.

Re: How much does employee turnover really cost?

#188

Post by at-fates-hands »

enraged_camel wrote: post #110
beat wrote: post #85

Earlier quoted context omitted.

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

Yes it does, actually. Not because it leads to any noticeable quality of life improvement, but because at those levels it becomes a pissing contest with other high-earners. Some rich people care a LOT about making more than other rich people in their social/work circle.

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 billion dollar range."

He said it made him a little more humble, but at the same time, he said there's a sort of pissing game when you're at those income levels with people like that.

Re: How much does employee turnover really cost?

#189

Post by shawn-furyan »

If a 'mission that matters' is important enough to spend 3 paragraphs on, but salary only deserves a single dismissive paragraph, then why exactly do we never have enough teachers?

If people really had such a great preference for mission over compensation, then the public sector, and non-profits could be 'selective'. I mean, the public and non-profit sector usually don't even have to do bullshit PR vanity projects (cough Microsoft-Google-Facebook-Amazon-Exxon-GE-BP) to convince people that they are not evil on balance. Still, it's the massively profitable companies that have the luxury of selectivity, not the ones with the best missions.

Like so much in 'management methodology' literature, there is such a willingness in this article to prefer anything (like small ungeneralizeable psychology studies[1]) that confirm clearly absurd magical beliefs (e.g. there are easy cheap scalable alternatives to compensation for retaining employees) that it is impossible to take the advice therein remotely seriously.

[1] that are being misinterpreted, to boot

[edit: added the footnote, grammar]

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