by VentureStreet  Join Our Network
You're Turnover Number Doesn't Bother you?...It Should!

If you're doing any internal metrics beyond sales numbers, you probably know your turnover rate. You might even have it broken down by "Voluntary" and "Involuntary" type. If you're taking the time to do the math, why aren't you concerned with whatever the numbers tell you? Doing something to lower turnover would put $$$s directly into your bottom line!

Say you have a small company of 100 people doing $12.5M in sales making 20% profit. If you're turnover is 33% you are loosing about $1M in replacement, retraining and lost productivity costs annually (trust me, that's a conservative estimate). Not to mention the fact that your managers and recruiting teams are spending double the amount of time interviewing and training people.

If you did some inexpensive things to reduce turnover - of any kind - to 18%, you'd put at least $500k back into your profit number making you a 24% profit margin company. That's an 18% improvement in profit without a dime of improvement in sales! Would you take that?

The trouble is, most people don't have a clue how to even begin reducing turnover. They say something like, "33% is not bad" or worse, "they (the people that quit) weren't right for us anyway". Wow! You'd never say, "last year's sales are good enough" or "that client (who didn't buy) wasn't a good one anyway".

Basic steps in reducing turnover:

1. Hire right in the first place! (a whole 'nother posting to come later)

2. Listen to people - regularly and often - foster an environment of trust so you'll get the real story

3. Review people's performance frequently - and honestly

4. Reward them with psychological paychecks - and well deserved bonuses when possible

5. Ask your people (surveys or in "town halls") what's working and what's not - be open and act on key issues

6. Get rid of the under-performers fast - good people leave when they see you not doing that

Need some help with your human resources? Get matched to local HR specialists near you.
Find HR Companies
Other articles you may like:
CT Is the 1st State To Mandate Paid Sick Leave
Effective January 1, 2012 certain employers will be required to provide 5 days of paid...

Entrepreneurs and Job Hunting
Many Entrepreneurs have a 'day' or 'night' job, while they are building their business.

Best Practices to Select “Successfully Matched” Employees
One of the biggest challenges facing HR professionals in the highly competitive and...

CPR For Job Seekers
"My interview is today, what am I going to do, oh boy, oh man. I'm nervous. I'm...

Entrepreneurs: How do You Empower Your Employees?
The benefits of empowering your employees and recognizing their untapped value to the...

Be the first to find this article helpful.
Need some help with your human resources? Get matched to local HR specialists near you.
About the Author

Rod Swartwood, HR Prime, LLC
1084 N El Camino Real Ste B353
Encinitas, CA 92024

Contact Author: request info

If you would like to re-print this article, please contact the author.
Other articles you may like:
Alternative to the Annual Review
Annual employee performance reviews may do more harm than good

Identify and Hire Top Performers
The key to retaining employees starts in the interview process

And All Other Duties As Assigned
Job descriptions are a useful management tool, but many smaller companies don't keep...

Why Is The HR Department Treated So Badly?
Of late I have seen more lack of appreciation of the HR professionals and the...

Study reveals 60% of work interruptions are caused by Social Media Activities
Study reveals 60% of employee work-place distractions are caused by e-mail, social...

Editorial Disclaimer: The views expressed in articles published on this website are those of the authors alone. They do not represent the views or opinions of this website or its staff. The articles on this site do not constitute a recommendation or endorsement with respect to any views, company, or product. Authors affirm that article submissions are their original content or that they have permission to reproduce.

Home   |   Articles & Videos   |   Affiliates   |   Networking Groups   |   Search by Category

Terms of Use   |   Privacy   |   About Us   |   Contact Us   |   Member Login

©2003-2024 - VentureStreet, LLC

Join Our Business Network