​Did you know...? American employees are on the move. Did you know, pre-pandemic, 3 million Americans a month quit their jobs to find greener pastures? In other words, just over 3 out of 10 employees left their new job before their first 6 months were up.  How expensive is this volume of turnover?

While the answer does depend on whom you ask, one answer places the cost at double an employee's salary to replace them when they abandon ship. Obviously different industries will experience different costs, and in many cases, replacement costs can be much, much higher. 

One such study determined the cost of replacing a salaried employee was 6 to 9 months salary on average. 

For a manager making $60,000.00 a year, that’s $30,000 to $45,000 in recruiting and training expenses. After all, it's not just the salary, it's the cost to train them as a replacement, as well as overcoming the negative impact on the remaining employees' morale and productivity, both of which can adversely affect company revenue.

This typically hidden cost also varies depending on the role of the employee. 

One study's average cost to replace high-turnover, low-paid employees ($30,000 per year) was pegged at 16% of annual salary. So a $10/hour retail employee would potentially cost "only" $3,328 to replace.

When replacing a midrange position, earning $30,000 to $50,000 a year, the cost jumps to  20% of the annual salary.  for example, a  manager earning about $40,000/year would be $8,000 to replace.

Need to replace a highly educated executive position? The potential costs rocket up as high as 213% of annual salaries! That $100K a year CEO will likely require about $213,000 to replace, if not more due to severance packages or other related costs.

Just like any other out-of-control budget, the primary factor in these types of costs remaining hidden is the lack of systems and processes to track exit costs. Areas and activities to inspect and assign a cost value to in your budget would include the following:

• Recruiting
• Interviewing
• Hiring
• Orientation
• Training
• Lost productivity
• Potential customer dissatisfaction
• Reduced or lost business
• Administrative costs
• Lost expertise

The Work Institute conducted a shocking study that revealed 42 million US employees voluntarily departed their jobs in 2019 – a whopping 27% of the workforce.  Unfortunately, this statistic is a trend that has steadily gotten worse over the last decade. In 2018, 40 million employees left their jobs by choice, and even back then it was an 88% increase over 2010 numbers.   

Take a sheet of paper and write down a list of all your employees in two columns: 1) replaceable, and 2) employees with mission-critical skills, employees who form the backbone of your business, or employees whose departure would upset you greatly.  Often about 25% of all employees fall into the 2nd column - their departure would impair or even destroy the bottom line until fully replaced. 

The sunny side to this situation is something can be done about it. Just being aware of these hidden costs can help a business owner be more prepared for a worst-case scenario financially. However, savvy entrepreneurs who are prepared for disasters, live instead with minor emergencies. Sign up for our free assessment interview below and discover which areas of your business are stressed and need to be shored up with documented systems, processes and implementation programs to fully onboard new and existing staff. 

Personnel Matters can make your business systems-dependent, instead of people-dependent. Start today, secure your tomorrow, and achieve stability. 

​Did you know…?

1. Strong onboarding procedure improves new hire retention by 82%
2. Over 50% of managers experience employees leaving because of poor onboarding prior to completing their probationary period
3. Turnover costs up to 300% of the replaced employees’ salary
4. On average it costs $4,000.00 and 24 days to hire 1 new person.
5. 40% of employees feel lonely at work in their first 90-days
6. 25% of companies do not include training in their new hire onboarding plan
7. An effective onboarding policy increases performance up to 11%!

The new person often feels nervous starting out on a new job. Helping them understand what is expected of them, showing them the ropes and any unwritten rules goes a long way towards improving their ability to perform at their best.

What is employee onboarding?

The HR term of “onboarding” is the process of integrating a new employee with a company and its culture; introducing your new hire to the expectations, skills and knowledge they will need to become a productive team member.

An all too familiar story in the hiring process – a new employee arrives for their first day of work. He is not designated his own workplace, coworkers barely introduce themselves. He doesn’t understand what the staff do or how he fits in, and spends the day sitting around watching, uncertain if he will fit in. He leaves the office wondering if the next day will make more sense, hoping it will be better.

According to surveys conducted on more than 1,400 hiring staff, 1 in 4 new hires will leave within 180 days.
Now it’s obvious that having an onboarding policy for new hires is vital, but do you know where the term “onboard” comes from?:
The word originally derives from the term “aboard,” referring to getting onto a ship. In the case of a new employee, the figurative company “ship.”

The word “board” comes from the English bord, which can literally mean “ship,” as well as board, plank, table, shield or deck. When expressing an action, as we are when an employee is being onboarded, board originally meant to “come alongside” a ship. Later it came to mean getting onto a ship.
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​Don’t underestimate the importance of good onboarding. Done correctly and thoroughly, you allow your employees to thrive in the company, creating a better work environment, customer experience and a better bottom line. 

The Department of Human Resources has the responsibility of protecting both the employer and the employee through the development of job duties, job manuals and company policy, which create a strong structure and company culture. 

The documentation process starts from the moment a position has to be filled. Generally, the person (executive) that request the position be filled, should list out the position requirements (in writing) so HR can create a very thorough job posting that lays out expectations to the prospective applicant. 

The entire hiring process must be documented with written interview notes in the applicants file, (see interview dos and don'ts), a written offer letter, including a job description as to expectations. In this way, when the applicant accepts the offer, he or she also signs off that they have read the job description and are attesting they can carry out the duties. 

The next phase is the on-boarding phase and should include premise orientation and orientation to the employee handbook and the general company policies.  (HR Policies and Procedures).

The documentation process must continue further with the training of the new hire as to HOW to execute the job. Each company owner has their established protocols and "ways" they expect a job to be carried out. This all must be communicated to the new hire so they can be made to do the job successfully. (If you do not have job manuals - contact Personnel Matters and we will design and develop job manuals for each position within your company - Job Manual Assessment and Development).

The new hire is on a 90-day introductory period. During this time, they should be continue to train for their position, gain an understanding and it would not hurt to re-read their job duties and all policies related to their job at least one more time after a month of doing the position. A lot of the policies and procedures will be in context and understandable. Again, this should be documented. 

The 90-day performance review should be done at the 90-day mark. Not 2 or 3 months later. The performance review should contain all the employee did correct and areas of improvements and a performance improvement plan (PIP) which documents expectations. If you do not have these. We can provide customized job performance forms, corrective actions forms, performance improvement plans, etc. HR Policies and Procedures

Annual performance reviews should be conducted. These can be at the anniversary date or often times, executives may do all employee reviews in the last quarter of the year. 

Throughout the year, any verbal conversations should be followed up with an email to put everything in writing. Any corrective actions, training or discipline steps (whether verbal or written warnings) must be in writing with a copy to the personnel file. All corrective actions should refer back to company policy or procedures. 

If you follow your own hiring and on-boarding system, with a qualified candidate who was correctly on-boarded and trained properly, you should rarely have to discipline the employee. None-the-less, we do find that the discipline process is necessary and should be done fairly and with specifics. Never allow days or weeks to pass before disciplining the employee. The discipline should be done referring back to the employee handbook or company policies, as to what specifically was violated. 

Should the employee continue to make the same errors, despite corrective actions, training, corrective actions, discipline and more discipline, only then should they be terminated. (The employee handbook should be very clear as to what is considered immediate terminable offenses such as stealing, outright dishonesty, harming or putting an employee or the company in danger, etc). 

NO employee should ever be surprised when they are terminated, because they have been corrected along the way.  As an employer, you will have all your documentation in place, so should never feel that you have to keep an employee.

The work relationship works both ways. The employer who provides clear expectations and has the basic company structure in place to allow an employee to carry out those duties and an employee who is qualified and capable of carrying out those expectations, makes for a happy work scene, where both employer and employee are protected. 

Please visit www.achievestability.com for a free assessment of your company HR policies, job descriptions and job manuals. 

What is workplace bullying? ​It is a persistent pattern of mistreatment from others in the workplace that causes either physical or emotional harm. It can include such tactics as verbal, nonverbal, mental or physical abuse or humiliation.
 
There are two types: 1) the individual who walks around putting people down and making less of their work and their value and 2) the individual who screams and yells insults and degrades another.

In the majority of cases, bullying in the workplace is reported as having been by someone who has authority over their victim. However, bullies can be peers and subordinates, which can be covert or overt. Negative effects are not limited to the targeted individuals, but to the entire group with a decline of employee morale and change in organization culture.

What is Company Culture? 

​It refers to the beliefs and behaviors that determine how a company’s employees and management interact and handle internal and outside business. Often company culture is implied and develops organizationally over time from the cumulative traits of the people the company hires.
A company’s culture will be reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, treatment of clients, client satisfaction and every other aspect of the operations.
 
Managers, academics and sociologists describe the character of a company, not only through generalized beliefs and behaviors, but also through company-wide value systems, management strategies, employee communication and relations, work environment, attitude and their charismatic CEOs and upper level Management.
 
What can you do to create a better work place? 

First and foremost, if you are experiencing any harassment of any kind, whether it is the office bully or sexual harassment, you must report it in writing. Do not simply do a verbal report or mention it to another co-worker. If it is a superior committing the act, report it to the Owner. If it is an Owner, go to the HR Dept. and your supervisor. Be very detailed in the report of exactly what occurred.

If you feel threatened, go to HR and ask to see the company policies for the organization. Find the employee handbook. As part of being HR compliant, all businesses should have an employee handbook, which will contain the written recourse in such circumstances.  
 
The moment a situation occurs, it should be written up with specifics. If you let days or weeks go by, the details get hazy and you lose the specifics, which makes things harder to correct.
 
When putting it in writing, give exact details as to time, place, exactly what occurred, any witnesses. Send this by email so you have a paper trail. You are also protecting yourself as you are now documenting everything. If there is retaliation, you can show in writing all documents and seek legal assistance.
 
The bottom line – it takes a group to help keep the rules in place. HR is responsible for ensuring the company policies and structures are in place to allow an employee to succeed at his job by knowing the expectations from the moment the hiring is started to the entire onboarding process and the training of the employee on their duties and their expectations as an employee.
 
Go to www.achievestability.com for more information as to how we can help you, the business owner, reduce the risk of legal ramifications and help your company achieve stability in the work place.