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How much does employee turnover really cost?

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Re: How much does employee turnover really cost?

#291

Post by closeparen »

beachy wrote: post #156
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.

Doesn't the military have a deliberate policy of ensuring high turnover environments by relocating all of its staff every couple of years?

Maybe there is something to be said for preventing people from getting too comfortable, or even establish trust relationships outside of the designated bureaucratic channels.

Re: How much does employee turnover really cost?

#293

Post by taneq »

softawre wrote: post #169
phaus wrote: 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…

It is also interesting to think your number, 200k, is strictly based on how much you make now. What would your 18yo self said about 100k? What do you think about a Netflix engineer making 300k? They'd probably be happy with 500k (though, cost of living, derailment ahead..).

18-year-old self would be comparing with entry level, rather than senior level, salaries. If you account for both that and inflation, the right question is "how would your 18yo self feel about $45k/y?"

Re: How much does employee turnover really cost?

#294

Post by bitJericho »

trome wrote: post #252
TuringNYC wrote: post #247

Earlier quoted context omitted.

I would probably agree that "money doesn't motivate people past a certain point"...except when the cost of housing goes up every year. It is not like the extra money most people seek is more and more vacation money -- most are just trying to keep up with rents.

I'm at this training with a developer from South America who just moved to the US, and holy moly he got screwed over. He is earning $15/hr writing PHP for this small company in an expensive area ($1350/month for 1 bed & 1 bath) with a broad non-compete and $4k that he will have to pay back if he leaves within the next 12 months for this training. I know the training itself is free (they actually are giving us a few g…

He should be suggested to just leave and say fuck you to the bill. It's the only way to deal with crooks in the US.

Re: How much does employee turnover really cost?

#295

Post by rejschaap »

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?

No, but they can adjust much quicker than regular employees. Adapting to new environments is a skill that can be trained. Freelancers who do a lot of different jobs for different companies have a lot of training.

But you are missing the point. The idea is to have a small core of highly skilled devs who can chop complex tasks/systems into bite sized chunks that can be outsourced.

I've seen it work, but it's very difficult to pull off. I've seen it fail more often.

Re: How much does employee turnover really cost?

#296

Post by dba7dba »

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…

> I've been to management seminars where they downplay the importance of money, saying that employees are mostly motivated by other factors

Classic example of telling stories that the audience wants to hear?

WHAT management consultant will tell CEOs that they need to pay their employees high enough salary to the point that they won't leave for another company?

Don't mean to be a cynic, but it's all about money.

Re: How much does employee turnover really cost?

#297

Post by collyw »

mightybyte wrote: post #234

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…

One place I worked couldn't possibly give me the pay rise I asked for, yet they are now using 1 and a half employees to do my job (one full time, one part time).

Re: How much does employee turnover really cost?

#298

Post by bagels »

joshyeager wrote: post #162
geofft wrote: post #126

Earlier quoted context omitted.

I've always wondered how employers measure "market rate". If there were a reliable public source of market rate, negotiations would be much simpler, and they aren't. And presumably the managers themselves aren't actively interviewing at other companies to see what they'd get offered. So I think the only good source of market rate is people (either candidates or current employees asking for counteroffers), and if you'…

We buy market data from two sources every year. They get their data by collecting it from the companies that buy their data. Obviously that's not perfect, but it's more objective than most other methods. That hardest part is figuring out which generic categories match our specific positions, since every company in the survey has different definitions and requirements. Our employees seem pretty happy with the results,…

What sources?

Re: How much does employee turnover really cost?

#299

Post by cmdkeen »

stephen_g wrote: post #282
_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…

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…

The management courses I've done have said that money is a terrible motivator but a really powerful de-motivator.

It is a terrible motivator as the impact of a raise is short lived, we very quickly come to believe we are worth the higher pay. See Wall Street and SV salaries. Once you're happy with your pay things like challenging work, recognising success, personal development, good co-workers become much more effective.

It is a powerful de-motivator if you're being paid less than you think you should be, to the point that the weighting between the two effects is almost entirely on the de-motivation side.

Re: How much does employee turnover really cost?

#300

Post by stubish »

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…

The management seminar only told half the story.

Money isn't a motivator for doing better work. Once people are being paid 'enough', the studies showed increasing pay lowered performance.

The part they didn't mention is that money is a major factor in choosing who you do the work for. Of course you are going to haemorrhage employees if they get a much better deal to do the same job for someone else.

Companies that pay more will get to pick the best people from the talent pool, who may perform worse due to being overpaid, but the company still comes out on top because underperforming top tier employees still perform better than the remainders working for a 'standard' salary. And thus wages are driven up in industries where talent is at a premium.

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