Tag Archives | employee

Cost of Turnover

See also:
Hire For Traits, Not For Talent
Corporate Zombies: Combat the Rise of Unengaged Employees
Millennials: The Hippies of the 21st Century
Turnover in Collections is Destroying Your DSO

Cost of Turnover

If you take a look at any company’s income statement, you will notice that one of the largest expense items is salaries or compensation. While companies require employees to conduct business, it is expensive to have them. What happens when those employees leave? Many times, companies do not calculate the cost of turnover and how it impacts the bottom line.


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What is the Cost of Turnover?

The cost of turnover is the cost associated with turning over one position. This calculation includes the cost of hiring for that position, training the new employee, any severance or bonus packages, and managing the role when it is not filled.  Every company will experience some turnover. When a company has high employee turnover, they risk impacting the profitability of their organization, the culture, and the productivity.

Every organization should strive to retain their employees for as long as possible. If they see a uptick in employee turnover, then they should take action to reduce turnover and improve retention. This results in more efficient operations and higher profits.

How Turnover Impacts Profitability

Previously, we mentioned that turnover impacts profitability. There are various ways employee turnover impacts the profitability of a company, including employees picking up duties (overtime pay, injury, exhaustion, decrease productivity), the cost of hiring a new employee, and the overall state of the company’s culture. For example, a company that has a heavy presence on the web looses its marketing director. The current employees will have to figure out what that position actually did, pick up extra responsibilities, work overtimes, etc. If it was a planned departure (more than two weeks), then the transition may be more smooth; however, if it was an unexpected departure, then the company will be in a bind.

Now, it’s time to fill that vacant role. That takes time – especially, if you are slow to hire and quick to fire. In addition, the current hiring process is not cheap either. No matter where that employee lies on the income statement – in COGS or SG&A – employee turnover has a huge impact to the bottom line. Either, you experience a sales person that is not selling (decreased revenue and increased costs) or a support person that is just increasing costs.

Calculate the Cost of Turnover

So, how do you calculate the cost of turnover? First, know the primary costs that are associated to turnover 1 position. Those include, but are not limited to, the following:

  • Cost of hiring
  • Cost of training and/or onboarding
  • Any severance or bonus packages upon departure
  • Loss in productivity during vacancy
  • Errors in customer service
  • Loss of engagement from other employees

Use the following formula to calculate the cost of turnover:

Cost of Turnover = (Cost of Hiring + Cost of Onboarding and Training + Severance + Loss in Productivity) * Number of Employees Lost

Focus On Employee Retention

Turnover impacts profitability, so it is important that you focus on employee retention. There are several reasons to focus on employee retention, including consistency, the bottom line, culture, and reputation.

Learn how to be a financial leader who increases employee retention in their organization with our execution plans, whitepapers, webinars, office hours, and so much more in the SCFO Lab.

Consistency

Consistency is key in any company. If your company is experiencing turnover in a client facing role, then turnover will cause more problems than profitability. For example, a consulting agency has 5 project managers in a year. The clients do not know who is there project manager or if anything is getting dropped or who to contact. It’s simply frustrating. In another example, a company looses all of its experienced team members within a few months. Now, they have new employees that are not familiar with the process, systems, team, or company. It will be hard for that company to gain any momentum without a consistent staff or a staff dominated by rookies.

Bottom Line 

On average, every time an employee leaves, it takes 6-9 months of salary to find a replacement. For example, if a person leaves and made $40,000, that’s anywhere between $20-30,000 of hiring and onboarding costs that were not previously anticipated. If you lose a higher level employee, then expect to pay more. The cost of turnover makes a dent in the bottom line.

Culture

How can you establish a company culture when your workforce is constantly changing? Establishing a good culture is difficult to do, but establishing a culture when there is no consistent workforce is near to impossible. We have seen how culture impacts the financial results of the company.

Reputation 

Beyond company culture, high employee turnover impacts the company’s reputation. Job seekers research the companies when applying to a position. If you cannot retain employees, then what does that say about your company? Your brand and reputation will be impacted by turnover. Unfortunately for the company, there are online resources such as Glassdoor that give employees and ex-employees a platform to give honest feedback about the company.


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Employee Retention Definition

The employee retention definition is the company’s ability to retain its current employees. If a company has a 95% retention rate, it means that the organization retained 95% of its employees for the given period. Every company should strive to improve their employee retention rate as it influences the culture and impacts the company’s profits.

Effective Employee Retention Strategies

The following includes effective employee retention strategies.

Establish Clear Goals and Expectations

First, establish clear goals and expectations. Employees become frustrated when they are unsure as to what their duties and expectations are. Communicate clearly with your team what your expectations are and what their responsibilities are. In addition, make goals together as a team. They will be more attainable, and everyone will be on the same page.

Offer Competitive Benefits

Among many reasons, studies rate salary as a top reason why employees leave a company. If your company is not able to exceed competitive benefits, then at least offer comparable benefits. Remember, salary is not the only reason why employees leave.

Culture

Culture is proven to impact the financial results of an organization. Establish a company culture that makes it enjoyable for your employees to work there. Some companies like Zappos are extremely customer centric. Other companies may offer flexible working environments (remote work, flex desks, etc.). Moreover, create a culture of open communication. The #1 reason why someone leaves a company is not because of salary, but it’s because of the manager. If there is an issue, fix it the first time you hear about it.

Value Employees 

Above all else, make your employees feel valued. If an employee works 40 hours a week, then you (the company) take approximately 24% of their time up by work alone. And if that employee sleeps an average of 8 hours a night, then about 57% of their week is either working or sleeping. Then the remaining 43% is spent eating, running errands, and spending time with family and friends. With such a significant amount of time at the office, reassure them that their work is valuable. Show them how they are contributing to the bottom line.

Start addressing turnover by recruiting a star quality team that is right for your organization. Determine which candidates are the right fit for your company, and click here to access our  5 Guiding Principles For Recruiting a Star-Quality Team.

Cost of Turnover

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Cost of Turnover

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Recruiting vs Staffing

Difference Between Recruiting vs Staffing

The difference between recruiting vs staffing is that recruiting is acquiring talent to be a full-time employee. Whereas staffing is the hiring of an agency to provide temporary workers.

Recruitment / Placement

There are many recruitment agencies or placement agencies. It may also be referred to as a retained search. They typically charge a percentage of the hire’s salary as a placement free. Those agencies then collect resumes, interview, vet, and eventually get the client’s approval for hire. After the client approves and hires the recruit, the agency has finished their job. The client company not only hires the recruit, but is also responsible for the Social Security, Medicare, and employment taxes. In addition, those employees usually expect benefits such as health insurance and 401K.

Staffing Agency

Conversely, a staffing agency fills the gap when a client company needs a number of employees immediately but does not have the resources (capital) to afford all that is involved with hiring an employee. Staffing provides temporary workers that can be specialized to the client and bills them on an agreed to hourly rate

Hiring Process Through a Staffing Agency

A staffing agency has numerous job ads published to recruit the best talent. The agency then reviews the resumes, interviews potential candidates, and eventually, finds the perfect employee to fill a position at a client company. Depending on the demand, agencies can have a significant amount of employees that they can deploy.

Hiring a Staffing Agency

When hiring a staffing agency, it is important to assess your needs. Are you seeking specialized workers? Do you need 80 employees tomorrow or just 2? Different staffing agencies are going to be able to help you with what you need.

Advantages of Hiring Through a Staffing Agency

Some advantages of hiring through a staffing agency include seeing a potential employee in action before making the commitment to hiring them. Companies also are able to offset the costs of hiring to the staffing agency – essentially stretching their dollar. Additionally, companies are able to get a number of employees quickly, bypassing the weeks hiring usually takes.


Looking to hire a staffing agency to fill your accounting department needs? The Strategic CFO has recruited the best talent to serve your staffing needs. Click here to learn more about how we can serve you best.


recruiting vs staffing

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Black Friday

See also:
Traditions Turned Financial Fluctuations
Improving Profitability – Fuel for Growth
Product Life Cycle Stages
Beware of the J Curve

Black Friday

In America, Black Friday is an event that is not only the most shopped on day during a typical year, but it also generates huge sales.

“Only in America do people trample others for sales exactly one day after being thankful for what they already have.”

~Author Unknown

Black Friday Definition

The Black Friday definition is a retail store sale that occurs the Friday after Thanksgiving – an American holiday in November. Many consider this event to be the kick-off to the Christmas shopping season. Many retailers, such as Walmart, Kohls, Kmart, Macy’s, Express, and other major retailers, open their stores in the early hours of the morning to receive the first rush of customers. Door busters, sales, huge discounts, and giveaways are all part of this event.

The History Of Black Friday

Let’s look at the history of Black Friday. Black Friday originated in 1952 as the start of the Christmas shopping season. Because many states in the United States considered the day after Thanksgiving to be a holiday as well, retail shops realized that there were enormous amounts of potential shoppers available during this four-day weekend. But since 2005, this event has launched into record numbers for sales, shoppers, etc. For example, sales dropped for the first time since the 2008 recession in 2014. Yet, sales boasted $50.9 billion over that weekend.

Although not all states in the United States permit workers to work on national holidays or even the day after Thanksgiving, companies have broken many boundaries to take advantage of this rush of customers. Over time, retail stores and e-commerce platforms have expanded on Black Friday to include Cyber Monday. It’s become a tradition to many.

Cyber Monday

Because Black Friday became such a hit, online companies created another shopping event – Cyber Monday. It occurs the Monday after Thanksgiving and encourages shoppers to purchase more gifts and things on Monday. Originally, it was launched in 2005.

The Cost of Black Friday

While it may be tempting to join in on Black Friday specials and sales, you have to consider the cost. Remember, a sale isn’t necessarily a good sale. It has to be a profitable sale.

Some of the costs associated with Black Friday include.

How to Win on Black Friday

In order to win on Black Friday, you have to price your products for profit. Especially since you project to sell large quantities of product, you need to make sure you don’t start with a pricing problem. If you cut prices off a product that is already not profitable, then you will loose more potential profit. Before you start planning for Black Friday, make sure your pricing is in check. Click here to download our Pricing for Profit Inspection Guide.

Price for Profit During These Sales

Each sale you make has to return a profit. Therefore, you need to allocate as many costs to each good to make it easier. How much inventory do you need to push in order to turn a profit? But also, what prices are customers willing to spend? The trick with Black Friday is that since everyone is competing for the best deal, you must know what others are pricing the same product at.

Reduce DSO by Turning Over Inventory

The risk for big sales like Black Friday is that there will be some that cancel their credit card transaction for $1,800 worth of product. Because you are putting a lot of cash up front to increase inventory, you need to collect cash as quickly as possible. For example, you can offer discounts for cash only. For other pricing tips, download the free Pricing for Profit Inspection Guide to learn how to price profitably.

Black Friday Definition, History Of Black Friday

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The Red Flags of Fraud

Businesses lose millions (if not billions) of dollars due to fraud. But how do so many cases of fraud go unnoticed until the damage is done?  Often, it’s because businesses don’t recognize the red flags of fraud soon enough.

Working with many entrepreneurs and their companies for the past 25+ years, I have unfortunately have come across numerous instances of fraud in companies.  The harsh reality I’ve discovered is that if an employee wants to commit fraud, they can do it.  It’s just a matter of how easy you make it for them.

If you suspect there may be fraud in your company, start by confirming that your unit economics are in line with expectations. Download the free Know Your Economics guide to break down what’s going on in your business.

Red Flags of Employee Fraud

One of the most noticeable warning signs of fraud is employee behavior.  Do they act controlling or feel the need to over-compensate their role?  If your employee needs to have sole responsibility, or if he or she needs to have the final say in a decision, it’s probably a good idea to monitor that employee’s activity to determine the reason for their behavior.

Here are some other behavioral signs of fraud to look for:

Refusal to take mandatory vacation or sick leave

Coworkers and managers love an employee who never takes a vacation and works hard.  Many of us wouldn’t question this behavior because it’s getting us faster results.  Sometimes, what looks like hard work is actually an employee covering their tracks.  Employees, particularly those working in a position where fraud is more likely, should be required to take time off.  This not only short-circuits fraudulent activity, but it ensures that employees are cross-trained.

Employee lifestyle changes (new house, expensive jewelry, cars or home)

According to a 2014 Global Fraud Study, 43.8% of occupational fraudsters live beyond their means. Does your employee have a better house than you? What about his or her car? Here’s my general rule of thumb: if your employee has nicer belongings than you, that’s a red flag. It’s time to check your books.

One time, I recommended to one of my clients that she should outsource her payroll to an external payroll service. I usually recommend this because it’s easier and less-prone to fraud. Rather, my client declined this suggestion and claimed that she could do payroll better than a service.

This client always dressed nicely, to the T. She’d walk in with a kind of confidence and drove a nice car (nicer than her boss!). Everyone saw her as a nice person, because she offered to stay back and let the cashiers go home.

Seems like the perfect employee, right?

Actually, it turns out that she had been cashing checks to herself by voiding cash transactions and pocketing the cash. See what I mean? If your employee has nicer belongings than you, that’s a red flag. It’s time to check your books.

Significant personal debt and/or credit problems

Ideally, a company should perform background and credit checks before hiring. However, some companies just don’t want to go through the paperwork.

For example, one client I had never made copies of their original checks. When I did my audit, I found half a dozen missing checks. The controller had been running the checks for his own personal use.

One day, the controller went to lunch and never came back. After running a background check, we found out that he was convicted of embezzlement five years prior.

Borrowing money or requests for pay advances

In the same study, 33% of occupational fraudsters have financial struggles or difficulties. When a fraudulent employee steals or “borrows” money, oftentimes he or she will rationalize. “It’s okay, I’ll just pay them back later.”

For instance, let’s say someone is in charge of a company credit card and uses the company credit card on accident. When she gets to work the next day, it’s written off. No one questions the personal expense. So then a pattern begins – an accumulated rationalization that she will “pay it back later.”

Easily annoyed at reasonable questions

If an employee snaps because of an obvious or reasonable question, he or she is likely suffering from guilt or preventing the questioning from going further into detail. If this ever happens, keep asking questions. You’re bound to get the answer you’re looking for (even if you don’t like it).

There are many other signs or “red flags” that you should be aware of. However, controlling behavior doesn’t always reflect fraudulent employees. Basically, all you need to know is: be careful who you trust, be aware of your employees’ behaviors, and know your economics.

Where are the red flags in your financials? Calculate your unit economics with our free guide!

How to Prevent Fraud

Outsource your Payroll

Payroll processing is a hot area for fraud to occur.  Because of this, I recommend payroll to outsourced companies because it’s easier to prevent fraud. Instead of keeping track of multiple employees’ checks, you only have to write one. The person writing the checks (you) is not the same person running the transaction.

Know your Economics

If you are regularly checking to see that your unit economics are in line with expectations, it’s more difficult for fraudulent activity to go unnoticed.  Anomalies will come to light and be investigated and resolved sooner.  Creating an environment where business performance is closely monitored discourages fraudsters much like an alarm system on your house discourages burglars.  If you perform a consistent audit within your company, you’re less prone to fraudulent activity.

Perform Background and Credit Checks

Save yourself the heartache of dealing with fraud in your company and invest in a regular background check process. You never really “know” your new employees until you’ve worked with them for a couple of years, but at least you’ll have their “red flag” behavior in writing.

Conclusion

In conclusion, security is not only an issue externally. Here are a few key points to take with you: If your employee in a position of trust has a nicer car than you and nicer clothes, check your books. Stay aware of your employees’ behavior. Be prepared – do background and credit checks on your new hires. And finally, don’t wait until a crisis to know your economics. Want to create an environment that discourages fraud?  Keep track of your company’s economics with our free guide and start taking a closer look at what’s going on in your business.

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How long do you keep a job?

how long do you keep a job?

That’s the biggest question being asked by both employees and employers alike: how long do you keep a job? What’s normal in this day and age? If you would have asked 20 or 30 years ago, the answer would have been: “You keep a job for 20-30 years.”

So, how long do you keep a job?

Let’s analyze this from two perspectives: the employee and the employer.

Employee

As an employee, it’s typical for an employee to take a little while to get used to their job (3 years to be exact, but we’ll talk about that a little later!).  When you first get hired, you may notice that the first 6 months or so of your job are really unproductive. You are trying to grasp the systems, organization of the company and so much more. It’s difficult to jump into a job at 100% efficiency.

But as an employee, it’s reasonable to expect for you to work in multiple companies throughout your career. It’s even expected for someone to have multiple careers throughout their lifetime. But how long is an appropriate time for you to stay at one job?

First, it’s important for you to realize how expensive you are as an employee. Through searching, hiring, training, mentoring, and investing time and money into you, a company expects that its investments will return a profit. Simply put, you should stick around as long as you are providing more value than they’ve invested in you.

The company that has hired you has essentially invested in you. They are looking for their return on investment (ROI). Of course, they are going to have bad investments (i.e. anyone who leaves before 3 years) and really good investments (i.e. anyone who stays with the company 3+ years).

Employer

As an employer, you’ve probably realized that there is one thing that you can’t avoid: humans. You buy from them. You sell to them. You work for them. And you hire them.

Humans are an integral part of business and life. Nowadays, using only resumes to screen candidates for jobs is a thing of the past. LinkedIn, although it may not be the best platform, has become the Facebook for resumes.

how long do you keep a job?

LinkedIn

Have you ever searched for employees through LinkedIn?   There’s always that person who first looks like a great candidate. They’ve worked in prestigious positions in reputable companies, BUT then you find your eyes focusing on the time spent working there. 3-, 5-, 9-, 15-months… It’s safe to assume that there is something wrong! Whether it is the employer just not liking the employee or the employee being extremely fickle, it’s easy to assume that if someone has a work history like that, you should run in the opposite direction.

That’s not to say that you should automatically run the other way if a candidate lists 4-6 jobs for only a couple months. Analyze their age, stage in life (recent college graduate?), and type of position. Particularly with internships, the average time spent in those positions are 3-4 months.

Be aware of what their LinkedIn profile looks like. It could be your biggest indicator of likelihood of that candidate lasting at least 3 years at your organization.

3-Year Breakdown

Let’s digest what we’re calling the 3-year breakdown!

Year 1

The employer will lose money on an employee during the first 6 months of their job. The employee is training for the position, getting used to the culture and way of doing things, and trying to provide some value. It is acceptable to assume that you will lose money during those first 6 months of an employee’s job.

During the second half of the first year, the employer can expect to break even. Hopefully by this point, your employee should be feeling comfortable and is actually helping the company rather than costing you money. If you’re still losing money through the 3rd and 4th quarter because of a new employee, it’s probably okay. Every employee and every organization is different.

Year 2

Thankfully, you won’t be losing money into Year 2 after the hire of a new employee. By now, the employee should be earning the company revenue to cover his/her salary plus some for the company to reinvest. Most employees, however, continue to flirt with breakeven.

Year 3

By year 3, your employee should be excelling in the company. At this point, we come to a critical decision point: the employee leaves (by their choice our yours) or the employee continues on with the company. It’s important to get to at least year 3 to ensure that you’ve gotten value out of your hire – watch that your revenue increases with the hire.  All things being equal, you should expect to see higher profits due to good hires.

If you haven’t, then you’re employee either left early or you made a bad hire.

How do I hire a star-quality team?

It shouldn’t take you til the end of Year 3 to determine whether or not you made a good hire. Do a better job during the hiring process to know who and what you’ve hired.

It all starts with who you are attracting to your company. Try to attract star-quality candidates. Describe the type of team that you would deem star-quality in regards to your organization. Hold fast to those bullet points that you’ve created as a type of criteria when recruiting.

Still having issues figuring out how to recruit star-quality candidates to build your team? Download the free 5 guiding principles for recruiting a star-quality team. A bad hire could be catastrophic to your company. Hire star quality candidates today!

how long do you keep a job?

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how long do you keep a job?

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7 Warning Signs of Fraud

warning signs of fraudUnfortunately, companies of all sizes can become victims of fraud. In fact, a study on fraud published by accounting firm KPMG International found “a very large increase in cases involving the exploitation of weak internal controls by fraudsters up from 49 percent in 2007 to 74 percent in 2011.” Thus, internal controls are a first line of defense and are important in any size organization. So, implement them to reduce the opportunity for fraud. Whatever the size company, there are some warning signs of fraud that are important to pay attention to.

7 Warning Signs of Fraud

1.  Is the person reconciling the bank statement also a check signer?

These are important duties to segregate. When combined, a person signing a fraudulent check can go on without being detected.

2.  Does your company have several bank accounts?

Multiple bank accounts make inappropriate movements of cash harder to detect. So, make sure you understand the business need for each bank account the company has and use as few accounts as possible.

3.  Do you have a budget to compare with your actual financial results on a monthly basis?

This is an important control in the detection of unauthorized transactions.

4.  Have you noticed a controlling personality or secretive behavior on the part of an employee?

This may be a sign that a person is being deceptive or needs to control people or the environment in order to conceal their activity.

(Have you ever heard of skimming fraud? It’s the most difficult fraud to detect.)

5.  Are there accounts on your financial statements that you do not understand?

Ask! If your question is not welcomed or answered to your satisfaction, then pay attention to this response.

6.  Financials that are not timely or closed on a monthly basis.

Lax or non-existent cut offs leave room for inappropriate entries in months long gone.

7.  Are employees related in your accounting department?

Part of a functioning internal controls system is the need for collusion in order to circumvent controls.

The Fraud Triangle

What is the motivation for an employee to steal?  The fraud triangle shows us 3 following conditions:

  • Pressure (motivation or intent to steal)
  • Rationalization (justification of dishonesty)
  • Opportunity (ability to carry out misappropriation of company assets.)

Well designed internal controls serve to mitigate the opportunity for fraud in your organization.

(Have you every wondered does fraud follow economic cycles?)

How to Reduce Fraud

What can you do to reduce the chance for fraud in your organization? First, remember that internal controls are necessary for all size organizations. Check out the following ideas that you will find helpful as you assess controls in your organization:

Live Ethics in Your Corporate Culture 

A culture of ethics starts at the top and you start by demonstrating it on a daily basis. We cannot emphasize this enough as it sets the bar for acceptable behavior in your organization.

Trust is Not a Control 

Trust is not a control, so design internal controls. Then put them in place for the position. Thus, they should not be for a particular employee, regardless of how trusted that employee is.

Pre-Employment Screening

Conduct pre-employment screening including background checks as appropriate.

Utilize Entire Team

If you do not have enough employees in accounting, then utilize others as part of your control system.

Have Different Signers

If your bank account reconciler is a signer, then find a different signer. Segregate the check cutting, signing and reconciling duties from each other.

Unbiased Reviewer

Have the company bank statements go unopened for review by someone in a management position who isn’t cutting or signing checks.

Choose Signers Carefully

Understand what authority signers have with company bank accounts and choose signers carefully. Add extra controls to your corporate bank accounts – an example is precluding any counter withdrawals so that all bank account withdrawals go through the check writing process.

Anonymous Alert System

Set up an anonymous way for your employees to alert you of any concerns/suspicions related to potential fraud within your company. Then take these alerts seriously.

Segregation of Duties & Controls

Segregation of duties and internal controls protect both your employees and the company.

If you want to reduce the fraud or detect fraud in your company, then check out our free Internal Analysis whitepaper. We have designed this whitepaper to assist your leadership decisions and create the roadmap for your company’s success!

warning signs of fraud
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Demand for Talented People: Addressing Employee Turnover

Working with clients over the years, it seems as though we’ve seen every employment trend come then go. Then they come back around again.  When the economy is bad, talented employees will stay in a less-than-desirable situation. Conversely, companies begin to tighten their belts and reduce headcount.  When the economy improves, these folks start looking for greener pastures and the demand for talented people increases. Especially as unemployment levels fall and economic forecasts become more optimistic, many of our clients are finding themselves in this situation.

The Demand for Talented People

A recent Robert Half & Associates report, The Demand for Skilled Talent, discusses what’s driving this demand for talented people.  Following are some of the contributing factors highlighted in the report…

Shortage of Candidates

An 18% increase in job openings from April 2013 to April 2014 has given talented people more opportunities to find the right fit.  Even better news for college-educated employees, job growth for degreed positions is projected to be significantly better than for non-degreed positions.  With the growth in positions requiring a college degree, it’s likely to become even more difficult for companies to fill highly-skilled positions.

Employee Confidence is Building

Voluntary separations are on the rise, up 19% over the last two years. This underscores the fact that employees are more willing to make a move.  With the increase in the demand for college-educated employees also comes higher salaries.  Average starting salaries for professionals are projected to rise 3.7% in 2014.  The promise of a bigger paycheck is motivating many talented professionals to explore their options.

Workers Are More Willing to Quit Their Jobs

As economic conditions improve, employees are more willing to take a risk on new opportunities.  The following chart from the report illustrates the growing number of workers who willingly left their jobs over the past two years.

 

Demand for talented people

 

Retaining Talent

Studies show that it can cost anywhere from 1-5 times the departing worker’s salary to find, hire and train their replacement.  This isn’t even considering the stress on an organization caused by the departure of key employees and the search for and assimilation of their successor. Given the current employment environment and the high cost and stress of replacing departed workers, it’s more important than ever to retain talented employees.

The Right Fit

One way to hang on to key people is to make sure they are the right fit when they are hired.  Too often, companies fill a position out of haste and fail to consider what the right person really looks like.  Click here for an article about hiring a star-quality team.

Temporary Employees

A trend that is becoming more prevalent in today’s companies is the use of temporary and contract labor.  This option is attractive to both employees and employers because both parties get an opportunity to “try before they buy”.  The risk of an employee being out of work when a contract ends is being mitigated. This reason for this is because of increased opportunities for contract assignments available to skilled individuals.

Offer Training or Coaching

Another approach to employee retention is to offer training and coaching for existing employees to help close the skill gap.  Today’s organizations are running leaner than in the past. So opportunities for mentorship within the company are often hard to come by.  Many employees possess the raw talent to be great team members. But they simply lack experience or soft skills that can get them to that next level.

Click here for the full text of the Robert Half & Associates report.

Download our free 5 Guiding Principles For Recruiting a Star-Quality Team to acquire the top talent.

Demand for talented people

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Demand for talented people

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Is Employee Turnover a Problem
Employee Turnover

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