How much does employee turnover really cost? • Hacker News Board

Re: How much does employee turnover really cost?

#231

Post by Zigurd » Wed, Jan 18, 2017, 1:01 AM UTC

sytelus wrote: post #144

TLDR; Losing an employee has cost of 1.5X to 2.1X of his/her annual compensation. A surprise case study here should be Amazon which has turned this wisdom upside down on its head. There have been rumors of 40% to as much as 70% churn at Amazon and despite of that company thrives.

I have more than one data point about that. Amazon burns people out at a furious pace. It seems like long term survivors strike a balance between not caring and careful career management. People find a way to live in such systems, and until they face a crisis, like attracting people after their explosive growth phase, companies can hold on to bad practices for a long time.

Re: How much does employee turnover really cost?

#232

Post by Spooky23 » Wed, Jan 18, 2017, 1:03 AM UTC

jedrek wrote: post #56

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'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…

Money isn't important if you pay enough.

If you treat people well on multiple dimensions, you can underpay them relative to their value.

Re: How much does employee turnover really cost?

#233

Post by kelukelugames » Wed, Jan 18, 2017, 1:08 AM UTC

_yosefk wrote: post #75

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…

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 talks, talent walks"

I've seen it so many times. Instead of wasting money on boosting morale, why not just give us cash?

Re: How much does employee turnover really cost?

#234

Post by mightybyte » Wed, Jan 18, 2017, 1:09 AM UTC

Years ago I left a great job that I loved working at a Fortune 200 company because I had to make a family-related move. The company I worked for also had a significant presence in the city I was moving to. My boss gave me a referral to someone there with the logic that I was already known to be a reliable contributor, and at the very least it would be lower risk for the company to move me there rather than hire a new unknown person.

I got several job offers in the new city including one from the same company. Problem was...the company was 20% lower than the best of my other offers! Apparently there was a company policy limiting how much of a raise could be given, so they straight-up couldn't compete. I got the distinct impression that I could have taken a job with another company, then come back 6-12 months later and gotten a much higher offer. Basically mandated turnover. Talk about an awful policy.

Re: How much does employee turnover really cost?

#235

Post by don_draper » Wed, Jan 18, 2017, 1:11 AM UTC

sytelus wrote: post #144

TLDR; Losing an employee has cost of 1.5X to 2.1X of his/her annual compensation. A surprise case study here should be Amazon which has turned this wisdom upside down on its head. There have been rumors of 40% to as much as 70% churn at Amazon and despite of that company thrives.

I don't know how Amazon succeeds if those rates are true. My experience has been that any company with a turnover like that is going to have a ton of tech debt.

Re: How much does employee turnover really cost?

#236

Post by aorloff » Wed, Jan 18, 2017, 1:17 AM UTC

battlebot wrote: post #106

sputknick wrote: post #63

Earlier quoted context omitted.

It's not about what salary that engineer deserved, but what they could command. That engineer might have done $1 million worth of work a year, and deserved a $1 million salary; but he couldn't go to another company and proclaim he was worth $1 million. He could probably go elsewhere and get a slightly above average salary, your company knew that, and that is why they paid him that.

You know what's even worse at trying to surface? When you saved your company millions of dollars! I'm not talking theoretical dollars here, I'm talking about last year X cost $Million, and this year due to my finding out some egregious mistakes and fixing them, that cost was measurably less by seven figures, and no one bothers to tell that story to the higher ups! I just wonder what these people do all day? Darn few…

Sounds like your manager didn't do his or her job. As a manager of people, you have to own these kinds of metrics and be prepared to wield them whenever the "value of an employee" question comes up.

Re: How much does employee turnover really cost?

#237

Post by st3v3r » Wed, Jan 18, 2017, 1:24 AM UTC

whyileft wrote: post #226

qaq wrote: post #79

Earlier quoted context omitted.

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

With freelancers you can just stop paying them after day 1 if they don't and try another. In some verticals of software development there is a ton of supply.

That tends to get you a reputation, which makes it harder to find more freelancers.

Re: How much does employee turnover really cost?

#238

Post by pavel_lishin » Wed, Jan 18, 2017, 1:29 AM UTC

ajmurmann wrote: post #150

battlebot wrote: post #106

Earlier quoted context omitted.

You know what's even worse at trying to surface? When you saved your company millions of dollars! I'm not talking theoretical dollars here, I'm talking about last year X cost $Million, and this year due to my finding out some egregious mistakes and fixing them, that cost was measurably less by seven figures, and no one bothers to tell that story to the higher ups! I just wonder what these people do all day? Darn few…

Because of stories like this I am generally against publicly praising individual employees. Whenever you do that there is gonna be somebody who did something great you don't know about and aren't praising. There might even be people who think that what the person you are praising did something bad. I remember a all-hands meeting where somebody got praised for working all weekend. Later in private several people were…

I don't think I agree; I think that your examples show that it's important to know your employees' accomplishments, and to praise people accurately. Public praise matters; I like it when my managers and coworkers acknowledge good work I do, and it's nice hearing that my coworkers are doing good work, too. Why should we all labor in the shadow? Why should we be afraid of praise?

Re: How much does employee turnover really cost?

#239

Post by lutorm » Wed, Jan 18, 2017, 1:34 AM UTC

makecheck wrote: post #45

Software development has some “special” traits that are not necessarily covered by this analysis. For one thing, you can’t just measure what a developer has done ; you need some sense of how easy maintenance is going to be. Given two brilliant solutions that required an extraordinary developer to create, one may be an indecipherable mess and the other may have been built in a way that makes typical maintenance tasks…

I'd venture to say this is not limited to software. If you design some hardware, or mechanichal machine or whatever, future maintenance const is a key factory. Just look at e.g. cars.

Re: How much does employee turnover really cost?

#240

Post by EpicEng » Wed, Jan 18, 2017, 1:41 AM UTC

freehunter wrote: post #130

enraged_camel wrote: post #115

Earlier quoted context omitted.

>>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.

Agreed that taking the low-paying position was a mistake if pay was a priority. Disagree that expecting a raise at the time he was verbally promised a raise was his mistake.

He wasn't promised a 20% raise