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Has America lost the will to work, or have organizations lost the will to connect with talent? Today’s business leaders face new challenges in the job market that require better efficiency in onboarding techniques to quickly establish competencies and retention techniques that can keep skilled workers engaged and committed. The data suggests that in today’s business environment, no industry is safe from the extraordinarily expensive problems of talent churn.
Related: High employee turnover means it’s time to re-evaluate
Turnover percentages
Voluntary employee turnover (employees who leave without being laid off or laid off) is predicted to increase almost 20% in 2022. On a macro level, it may be easy to attribute these numbers to the crushed retail sector struggling to keep storefronts open, but sales are hitting nearly every industry sector, including those with high-paying desirable job opportunities. The main industries with more than 18% turnover rate are as follows:
- Technology
- Life and Medical Science
- Consult
- production
Predictable, 45% of the voluntary turnover stems from employees who have been in the position for less than a year. Imagine being in an onboarding session at your new job, looking around the room at 30 other people, and knowing that about 15 people don’t last a whole year in the room. High turnover puts a real burden on organizational culture for employees who stay. With ongoing attrition, the remaining employees quickly become overwhelmed with the amount of work, find themselves constantly providing on-the-job training to new teammates, and have limited energy to bond with individuals who are unlikely to stay on track.
The US Bureau of Labor Statistics continues to report that the revenue trend is continuing and accelerating in many cases.
Related: 9 Ways to Retain Your Highest-Performing Employees
The true cost of sales
Organizations can plan or even design business models that encourage the natural attrition of talent. In consulting practices, it is not uncommon for organizations to both maintain a flat organizational structure and limit career ladders to just a few potential sports for promotion. With few employee promotion opportunities, career growth naturally encourages more senior employees to move up, keeping labor costs lower in the long run.
However, the current tight and stressed labor market makes the designed turnover more expensive. With unfilled jobs and recessionary pressures, the compensation for willing workers is putting increasing pressure on hiring managers and margins.
When an employee leaves voluntarily, especially unexpectedly, the true cost of sales becomes more than just an HR cost. When productive talent with organizational responsibilities leaves, organizations incur numerous additional costs:
There are several management accounting frameworks to track the true cost of sales. A simple equation is to add up the core costs of replacement and skill acquisition:
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HR recruitment costs
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Onboarding
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Own skills development
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Lost productivity until new talent is found
Then multiply the sum of 1-4 by the total number of employee positions that are converted annually to find the total costs in a fiscal year. The kind of roles that are reversed is also very important when calculating the cost of sales. Replacing pools of skilled and professional talent often takes longer and can require the use of recruiting services as much as 20% of a freshman salary to place just one person, with a 6 month fitness guarantee. In circumstances where hiring talent also requires talent to be lured away from existing jobs, the cost of replacing talent can be as high as higher than 100% of the annual wage for a single employee.
Related: Here’s the Secret to Reducing Employee Attrition and Lowering Costs
Solutions
The answer to solving and reducing organizational turnover is multifaceted. No solution is likely to magically support a business model, increase productivity and keep employees happy.
Undoubtedly, the most important part is giving any new employee the confidence that they can and will be successful and happy in their new role. A person may already have positive beliefs when accepting a new position, but this is not guaranteed. Furthermore, when accepting a new position, everyone walks into an organization with some beliefs about their own likely outcome (concerned, nervous, disappointed, overwhelmed, excited, and excited).
As a business leader, the diverse beliefs of new hires is an important cultural component to understand. First impressions of recruitment processes and job training are precious moments to motivate and establish positive basic beliefs.
Individualized motivational techniques require understanding and support from each employee and creating opportunities to change or reinforce positive beliefs. Broadcasting tools such as PowerPoint slides and video lectures are inadequate solutions used in onboarding to reach individuals.
Motivational training includes individual exercises and provides facilities to explore tasks and skills by seeing the consequences of each action or decision. With contextualized scenarios (situations that look like the actual space of a performance), training can help new hires achieve a world where their practice authentically matches the real world. The higher the degree of individualized support in authentic contexts, the greater the connection to the role expectations that new hires will have once they are done onboarding.
By addressing beliefs, setting realistic expectations, and supporting individualized paths to role mastery, leaders have a foundation to use a wider range of techniques to keep employees engaged and committed.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.