The Real Costs of Hiring and Firing- Why Staff Retention Is Such a Hot Topic in Employment
Deals with the issues related to staff turnover, costs and business practices issues.
The entire global employment industry is reinventing itself as the New Economy replaces the old style employment patterns. The emphasis now is entirely based on job design and cost efficiencies. Employment is a bottom line issue, directly related to business performance. One of the major factors in best employment practices in this environment is staff retention. This is a far more complex subject than it might seem, and there are direct financial impacts involved for business.
Staff retention basics
There are multiple issues in relation to staff hiring and firing. The core issues are based on hard dollar values:
- Cost of hiring and firing: The actual process of hiring and firing is costly, time consuming and imposes a greater workload on establishment staff while hiring is under way. The actual dollar cost of these processes is measurable (see also Productivity, below).
- Productivity: The theory of reducing staff numbers only works so far as it is actually possible to do ‘more with less’. Beyond that point it’s a liability, and can negatively impact business performance, creating backlogs and worse, in a multi-tasking environment, reducing capacity to take on new business.
- Knowledge base issues: Best practice employment studies place a strong emphasis on the value of the knowledge base of staff. The knowledge base includes problem solving and client relationship management skills. These are core business issues which are inseparable from business performance on a daily basis.
- Staff development: Some of the biggest corporations in the world have their own staff development programs. These programs are ‘staff retention by other means’. They’re advanced methods of providing incentives and career paths for staff which also enhance their business productivity for the corporations.
- Staff morale: Hiring and firing can have a very negative effect in the workplace. Insecurity is one of the most common reasons for people changing jobs. Some staff also react negatively to increased workloads, particularly if they’re able to get jobs which pay the same money for less work and/or offer other incentives.
Staff retention best practice
Best practice in staff retention is based on using testing methods like a staff survey or other parameters to define the best ways of retaining staff. These surveys are interesting in that they both define the most productive employment environments and address core business issues.
A highly productive employment environment includes some classic indicators of good staff retention:
- Motivated staff
- Strong knowledge base
- Good team relationships
- Good career opportunities in the workplace
- Positive view of employers
- Good staff development and career-relevant training
This is a profile of a highly productive, highly competitive business. The staff and the employer are literally on the same page. The staff sees direct benefits to themselves in their employment over and above wages and “having a job”.
Intriguingly, one of the best examples of this type of staff retention and business productivity relationship is expressed right at the heart of the employment industry itself. are truly productivity-based. Recruiters are highly motivated people. They work in a very strongly incentivized environment. Staff retention in this field reflects a form of professional career development with a very strong upside for both employers and employees.
It’s not a coincidence. It’s best practice.
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