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How much does employee turnover really cost?

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Re: How much does employee turnover really cost?

#71

Post by jackaltman »

x0x0 wrote: post #60
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…

To your second point: I read claims like Employees, Bersin explains, are appreciating assets that produce more and more value to the organization over time, which helps explain why losing them is so costly. And yet in a ten year career in the valley, I've really only gotten significant raises when changing companies. I've had lots of bosses try to talk me out of quitting, but none with at least $15k attached to that…

This is a great point. I've seen companies that are great and companies that are horrible about substantially increasing the compensation of their top performers. It makes a huge difference and should be an easy decision to make if companies take the time to think about it.

Re: How much does employee turnover really cost?

#72

Post by HarryHirsch »

protomyth wrote: post #51

This is one of those areas that would be amazing for academic study, but I doubt any company that would tell an interesting story would allow it. I would love for someone who had started with studies of tribes with an oral tradition to go into a software company and study how they work. I get the feeling that several similarities will show through even in a company that expects good documentation.

Karen Ho went to Wall Street for her dissertation: https://www.amazon.com/-/dp/0822345994

Anthropologists don't commonly live in mud huts, that's just a prejudice.

Re: How much does employee turnover really cost?

#73

Post by Aqua_Geek »

mevile wrote: post #40
nullnilvoid wrote: post #12

Many managers have the mindset that they can find replacements easily. If you don't do the job, there are 5 people lining up for this position. They don't realize the cost of turnover, partially because it is hard to quantify the cost. In the good old days, IBM and other blue chips would spend lots of money and send employees back to school and train them well. Nowadays, everyone is considered to be replaceable.

In my experience, this is not true in San Francisco. I've never worked anywhere in the bay area where engineers were thought of as easily replaceable. Everyone knows how hard it is to hire competent engineers around here. Even if people were lined up to replace a lost employee, just the interview process for hiring people is expensive as it takes multiple people out of their role to sit and interview someone for a da…

> I've never worked anywhere in the bay area where engineers were thought of as easily replaceable.

They may not have been thought of that way, but I've very much seen them treated that way.

Re: How much does employee turnover really cost?

#74

Post by irishcoffee »

mildbow wrote: post #41
Buttons840 wrote: post #30

Earlier quoted context omitted.

I would guess it's common for a team to be in a disfunction environment but stick together for the sake of the team and friendships. Once one person leaves though, everyone then leaves in succession. I'm in that position now. If a PM who I highly respect leaves I'll probably leave as well because I wouldn't want to deal with the stuff he protects us from. I also wouldn't want to abandon this guy, so I probably won't…

I've been through this once and it was enough for me. In retrospect, I should have left way earlier. I urge you to consider whether, by staying, you are just enabling the sort of disfunction you dislike :) Camaraderie is great and if there is actual friendship/respect then the relationship will continue even after you quit.

> Camaraderie is great and if there is actual friendship/respect then the relationship will continue even after you quit.

I can attest to this. Half my team has left over the past year, the other half all seem to be (and talking about) actively looking. We all still manage to get a poker night together every few months, as well as having a quite lively group text chat.

Re: How much does employee turnover really cost?

#75

Post by _yosefk »

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'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 creative, all supposedly to criticize "capitalism" but in fact to make the market work worse for employees who now actually have to argue with management that yes, money does motivate them, with the manager replying "I know it doesn't so tell me what's really bothering you" or what-not. I mean it's not like companies seek less profit having seen the TED talk, instead they learn that they can cut expenses by avoiding "needless" raises. Quite the heterodoxy, that.

Re: How much does employee turnover really cost?

#76

Post by draw_down »

x0x0 wrote: post #60
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…

To your second point: I read claims like Employees, Bersin explains, are appreciating assets that produce more and more value to the organization over time, which helps explain why losing them is so costly. And yet in a ten year career in the valley, I've really only gotten significant raises when changing companies. I've had lots of bosses try to talk me out of quitting, but none with at least $15k attached to that…

I don't see any reason why the world can't be wrong. Especially when what you mean by "the world" is really management in tech companies.

Re: How much does employee turnover really cost?

#77

Post by [deleted] »

vinceguidry wrote: post #31

In my studies of history, I'm finding this current thrust of individuals as stores of wealth over firms and nations to be quite interesting. Back in the colonial period, everything revolved around national wealth. The crown alone sanctioned and funded expeditions, chartered corporations, and fought wars. Over the last few centuries, power gradually shifted to the firm, then to markets, and now finally to individuals.…

[deleted]

Re: How much does employee turnover really cost?

#78

Post by bbcbasic »

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 is a factor - weighted differently for different people.

E.g. person A generally wants to be happy in their job, but needs $100k to maintain their lifestyle, pay the mortgage, not worry about bills etc. If paid $100k they wouldn't jump ship.

Later, person A has a baby. Well guess what happens next.

Person B also wants to be happy in their job, but they also want to invest in stocks for an early retirement. They get an offer at a stressful trading job paying 3 times their current salary. They think it is worth it in the short term so they go for it.

Re: How much does employee turnover really cost?

#79

Post by qaq »

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?

Re: How much does employee turnover really cost?

#80

Post by [deleted] »

Balgair wrote: post #25
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…

On 2: Ok all, why do diagonal promotions occur? I understand the issues around promoting when there is no room in the org chart, but I don't understand the issues with pay. Employees will shop the resume around, that is expected these days. And as the article points out, there are massive costs to a firm when those good employees up and leave. So why not just give a raise? Maybe you don't have the budget, I get that,…

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