【Business Management Class】Do you know the cost of losing a key employee?

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This post was last edited by lovelife1997 on 2019-4-5 at 16:48. The problems left behind when an employee leaves cannot be simply resolved by finding another person to fill in their role. Generally speaking, the loss of key talent requires at least 1–2 months for recruitment, 3 months for adaptation, and 6 months for integration ； In addition, there are recruitment costs equivalent to 4 months’ salary, along with a failure rate of over 40%. After an employee leaves, the replacement cost – from finding a new candidate to ensuring that the new employee can get up to speed – can be as high as 150% of the departing employee’s annual salary; the cost is even higher when it comes to management personnel. What’s even more concerning is that according to estimates by authoritative agencies, the departure of one employee leads to about 3 other employees considering leaving as well. Based on this, if the employee turnover rate is 10%, then 30% of employees are currently looking for new jobs ； If the employee turnover rate is 20%, then 60% of employees are looking for jobs. There is a huge difference between leaving a job after 3 months and after 2 years! Regarding the reasons for employees leaving, you can certainly cite the view of some celebrity: there are basically two reasons – insufficient pay and feelings of resentment. Employees at different levels with varying lengths of service have more complex and varied reasons for submitting their resignations. 1. Leaving the job after 2 weeks of employment: Leaving after just 2 weeks indicates that the actual conditions encountered by the new employee differed significantly from what they had expected, including their initial impressions of various aspects such as the company environment, onboarding training, benefits, and policies. During the onboarding interview, it’s important to explain the actual situation as clearly as possible, without hiding anything or exaggerating it. This allows new employees to form an objective understanding of their new employer, thereby avoiding a large psychological gap. There’s no need to worry that the new employee might not show up; those who are meant to leave will not stay anyway. Then, all the steps involved in the onboarding process are systematically organized, including everything from recruitment to the notification of employment, the arrival at the workplace, onboarding training, and the handover to the department where the employee will work. By taking into full account the feelings and needs of new employees, a systematic plan is developed to ensure that they feel respected and valued, and to provide them with all the information they need to know. 2. Leaving the job after 3 months of employment – Leaving the job after 3 months is mainly related to the work itself. This may indicate certain issues with the company’s job structure, job responsibilities, requirements for positions, and interview criteria; it is necessary to carefully examine what the causes are in order to take timely corrective actions and reduce wasted effort in the recruitment process. 3. Leaving the job after 6 months of employment: Leaving the job after 6 months is often related to the direct supervisor. HR needs to find ways to get the company’s managers to undergo leadership training, so that they can understand and master the basic qualities required for leadership. Managers should understand their subordinates’ strengths and align those strengths with their job responsibilities, so as to maximize the value they bring to the company, while also allowing the employees to demonstrate their own worth. An excellent manager is like a coach; he has the duty and responsibility to uncover potential and strengths, as well as to develop his subordinates, serving as a key driving force for their success. Changing the leader in the same department can lead to completely different outcomes; the performance of the same group of employees can also vary greatly – one group may be highly motivated and full of enthusiasm, while another may be full of complaints, have a disorganized team, and experience frequent turnover. A direct supervisor should be the first to be aware of an employee’s various actions and tendencies. A single word from them can resolve a problem or create conflict; if not handled properly, it will lead to a decline in team morale and combat effectiveness, thus entering a vicious cycle. Therefore, in teams where a large number of employees leave within 1 year, it is important to be aware that there may be a problem with their direct supervisor. 4. Leaving the job after about 2 years: Leaving after roughly 2 years is usually related to the company culture. At this point, employees generally have a thorough understanding of the company – they are well aware of various ways of handling tasks, interpersonal relationships, the cultural environment, delegation practices, career development opportunities, and even the company’s strategies and the boss’s preferences. As a company, it should reflect on itself three times a day, identifying any negative factors within the organization. Regardless of its size, every company needs a positive working environment that brings happiness to its employees. 5. Leaving the job after 3-5 years: Leaving after 3-5 years is related to career development. Without the opportunity to learn new knowledge and skills, there is little room for salary increases, and no higher-level positions are available; in such cases, the best solution for employees is to change jobs. But for companies, employees at this stage are of the greatest value, and losing them results in significant losses. Appropriate career development paths should be designed based on the different needs of employees of various types ； Understand the psychological state of employees and listen to their voices ； By investigating the supply and demand dynamics in the job market and proactively adjusting salaries and job structures, our goal is to retain employees; other policies can be adjusted flexibly depending on the circumstances. 6. Employees who have been away from the company for over 5 years develop greater patience. Leaving the job at this point is partly due to professional burnout; we need to assign them new responsibilities, more tasks that require creativity, in order to stimulate their enthusiasm. On the other hand, it is caused by a mismatch between an individual’s rate of development and that of the company; those who progress more slowly end up being eliminated. Employees who fail to keep learning and stay stagnant will inevitably be neglected and ignored by the company ； If a company grows too slowly and there are no opportunities for employees to advance, those who are ambitious will see no future prospects and will inevitably seek employment elsewhere. The main reasons for leaving the job in terms of length of service need to be determined based on actual circumstances, with adjustments made promptly to keep the turnover rate as low as possible, thereby minimizing the losses for the company.