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How much does employee turnover really cost?

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Re: How much does employee turnover really cost?

#81

Post by protomyth »

HarryHirsch wrote: post #72
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.

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

Where the heck did that come from. I'm well aware of cultural anthropology and have worked with a couple on academic grants. I just think those more familiar with oral tradition of tribes would have an amazing time in a software company.

Also, just for your information, not all tribes live in mud huts, that's just a prejudice.

Re: How much does employee turnover really cost?

#82

Post by jcadam »

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…

My last job gave me a ~2% raise the first year and a ~1% the next. I left shortly thereafter. Should have left after the first lousy raise.

The previous job gave me back-to-back 1% raises. Left that job after two years as well. Should have left at the one year mark.

I've been in my current job a few months. I'll stick around till the first annual raise cycle to see how they treat me. I don't think I'll give this employer a second chance if they screw up the first one (Hint: if your raise doesn't at least cover inflation + offset the costs associated with your annual medical benefits cuts -- I consider it a pay cut, and I'm not going to be happy. In fact, getting a "Congratulations on your (1%) annual raise" email from corporate HR is probably not going to get the reaction you were anticipating).

I actually had one employer that gave me an 8% raise at the two-year mark. So they got another year out of me (until the mass layoffs came).

Re: How much does employee turnover really cost?

#85

Post by beat »

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

Re: How much does employee turnover really cost?

#86

Post by JustSomeNobody »

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…

> 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.

Re: How much does employee turnover really cost?

#87

Post by withdavidli »

sputknick wrote: post #63
shanemhansen wrote: post #61

I've often been shocked at how a theoretically rational profit seeking business will happily throw millions down the drain rather than compensate an individual based on value. Ultimately I've concluded that although they may be greedy, most businesses don't make rational profit seeking decisions. They make decisions that stroke their ego, and sometimes their ego can't accept the value that certain employees bring to…

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.

This comment isn't against you, because you are right that a lot of companies calculate this way. It is also undeniably short sighted. Because value in this case is literally in the eye of the beholder. If they were worth at least million and mission critical, market rate was 100k-200k. Pay 400k-500k. Guarantee employee knows they are valued and no other company would match because the person isn't worth as much to the competitor.

There was an article a few years ago about a Google employee. Competitor interviewed, offered what they thought was a great package around 500k, found out candidate was making 3mil at Google. Failure on the recruiter part not getting that info beforehand, but can understand more senior folks not discussing till the end.

Re: How much does employee turnover really cost?

#88

Post by DanTheManPR »

krapp wrote: post #42
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.…

>Now, all you need is intelligence and mental fluidity to weather hardships. No longer is a job loss catastrophic. Just about anyone born in a Western nation can, if he decides to, gain an education and make his way up the social ladder. What Western nation do you live in? Because in the Western nation I live in, both job loss and education can be catastrophic for many people.

We have a long way to go. But the western world of today is, in a historical sense, unprecedentedly meritocratic.

Re: How much does employee turnover really cost?

#89

Post by Bartweiss »

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…

Maintenance (and maintainability) are definitely key questions for software development.

The first point, about keeping people who write maintainable code, I agree with 100%.

The second one, about keeping codebase expertise, seems complicated.

On one hand, we all know there are weird bugs and edge cases best handled by knowing the code intimately. What's 20 hours of QA and engineering for an unfamiliar team can be a 5 minute tweak for the guy who wrote the method, even with clear code and good tests. Weird bugs do happen, and just knowing that what it isn't can help with finding some awful probabilistic issue.

On the other hand, I wonder if this is a "controlled burn" kind of issue. Everyone's heard of systems that work fine for 20 years and then explode as soon as the expert leaves. Normally that's a design and maintainability issue, but at some level we're talking about bus factor here. You're definitely trading fewer crises for worse crises, but I don't know the rate on the tradeoff.

Obviously unplanned turnover is still a huge issue, but I do wonder what the right balance is on "just knows how to fix it" versus "institutional knowledge is safer than personal".

Re: How much does employee turnover really cost?

#90

Post by Balgair »

cmdrfred wrote: post #64
rbcgerard wrote: post #34

Earlier quoted context omitted.

I've noticed that many companies fail to recognize this, and hire two types of employees 1. Good ones who take the job for some reason, realize there are better options and leave shortly and 2. Bad ones that stay Rinse and repeat, and the cycle gets shorter, and the problems get bigger

I call it the burn and churn model. Game studios and IT MSP's both engage in it habitually. The firm I work for has a 200% yearly rate of churn for IT managers. They expect 24/7/365 on call and pay below market. Really its just a place where people go until they find a new job.

I wonder how AI will affect those business models? If you can on-board and find employees so quickly that you can sustain the burn-n-churn, then I think an AI would do it better and faster and not be fired either.
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