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

Re: How much does employee turnover really cost?

#91

Post by camelNotation » Tue, Jan 17, 2017, 8:25 PM UTC

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.

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 misinterpret that as a problem with the market itself.

Re: How much does employee turnover really cost?

#92

Post by _yosefk » Tue, Jan 17, 2017, 8:27 PM UTC

beat wrote: post #85

_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…

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

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 up your mind!

Re: How much does employee turnover really cost?

#93

Post by Arizhel » Tue, Jan 17, 2017, 8:27 PM UTC

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…

There could be a disconnect between hiring managers and HR and upper management. The hiring managers you know probably do understand the cost of replacing a lost employee and how hard it is to hire. The HR department that's actually in control of this, and of salaries, doesn't, or just doesn't care.

I have a theory that a lot of the terrible mismanagement we see with modern American corporations comes directly from HR. Didn't W. Edwards Deming say that companies would be better off just eliminating their HR departments altogether?

Re: How much does employee turnover really cost?

#94

Post by battlebot » Tue, Jan 17, 2017, 8:28 PM 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…

And yet isn't it just slightly odd how software consulting rates were the same 17 years ago as they are now? And there was all that inflation in the interim...hmmm...

Re: How much does employee turnover really cost?

#95

Post by battlebot » Tue, Jan 17, 2017, 8:29 PM UTC

jcadam wrote: post #82

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…

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 empl…

Don't hold your breath. Even superstars are fungible these days.

Re: How much does employee turnover really cost?

#96

Post by thecardcheat » Tue, Jan 17, 2017, 8:31 PM UTC

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 article states: "Multiple studies show that while under-compensation can definitely contribute to employee churn, over-compensation won’t make up for a bad workplace."

Does anybody have links to these studies? The under-compensation seems to be in wide agreement but I am curious as to what studies have been conducted that show that the preferred points (Growth, Impact, Care) are preferred over higher compensation.

Re: How much does employee turnover really cost?

#97

Post by mywittyname » Tue, Jan 17, 2017, 8:31 PM UTC

kornish wrote: post #47

vermontdevil wrote: post #9

Not hard to see the obvious. Look at Costco compared with Sam's Club. You can see the difference since Costco employees tend to stay longer there. https://hbr.org/2006/12/the-high-cost-of-low-wages

Another example in this vein is Henry Ford's $5 work day – wages dramatically above then-market rates prompted outrageous enthusiasm and loyalty from workers. http://www.henryford150.com/5-a-day/

There's a lot more to it than that.

>The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees' homes to ensure that they were doing things the "American way." They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become "Americanized." Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home.

http://www.forbes.com/sites/timworstall/2012/03/04/the-story...

Re: How much does employee turnover really cost?

#98

Post by CPLX » Tue, Jan 17, 2017, 8:31 PM UTC

camelNotation wrote: post #91

krapp wrote: post #42

Earlier quoted context omitted.

>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.

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…

> 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's quite a few people that you don't know then. The median personal income in the US is $30,240 for all workers over age 15 with income.

That means half of all working people in the US have less than $30k a year in income. What percentage of your "know many people" sample make less than that?

Re: How much does employee turnover really cost?

#99

Post by battlebot » Tue, Jan 17, 2017, 8:32 PM UTC

salarycommenter wrote: post #27

matwood wrote: post #18

Earlier quoted context omitted.

It mentions that market rate salaries are table stakes. So view market-rate compensation simply as table stakes, and spend your energy focused on the next level of Maslow’s hierarchy of employee happiness: opportunities for growth, the ability to have impact towards a purpose, and a caring environment that makes them feel valued.

There is market rate and then there is market rate. Have you ever met a manager who didn't claim to pay market rate and pull out the old "salary data" yarn. Managers seem to think that just because they say something their employees believe it when the reality is the employee doesn't care and will just replace the faulty manager.

The biggest thing the US needs is a management overhaul.

Re: How much does employee turnover really cost?

#100

Post by jventura » Tue, Jan 17, 2017, 8:33 PM UTC

jcadam wrote: post #82

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…

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 empl…

On my last job I had made a verbal deal with the previous CTO in which I would be raised in 6 months time after being hired. So after 6/7 months, I went to negotiate a raise with one of the owners and the product manager. I said explicitely that I was quite below market rate and would consider only a raise of at least 20%.

The result? I was offered 2%-3%, to be discussed on the next annual review (still some months to go), and the PM said strictly that it would depend on my performance. That happened on a Friday, and I quit the job next Monday. My conclusion: never accept verbal agreements again..