No hiring manager sits down for an interview with the hope that the candidate will leave the company shortly after being onboarded. Besides the obvious sentiment that such a swift exit would be a waste of time for the hiring manager, it can be tough to identify just how much of an effect employee turnover can have on a company as a whole.
According to a 2015 study from the Society for Human Resource Management, employee departures have a substantial, measurable effect on companies, costing them time, money and countless other resources. The study suggests that directly replacing employees can cost as much as 50 to 60 percent of their annual salary, with total costs associated with turnover ranging from 90 to 200 percent of annual salary.
When applied to executive salary ranges, these costs could be astronomical, especially for start-up companies with less room in their budgets for unforeseen expenses. According to the SHRM report, turnover costs the average company more than 12 percent of its pre-tax income. This jumps to 40 percent for companies at the 75th percentile for turnover rate.
These expenses go beyond the expected, such as HR staff time, accrued paid-time-off and onboarding replacement hires. Turnover can impact a company's diversity, strengthen its competitors and even contribute to other employees' decisions to leave.
Reducing turnover begins with hiring the right people. Working with an executive recruiting firm can help you identify candidates who are a better fit for your business, making your new hires more likely to succeed in their roles and build lasting careers in your organization for those executive or difficult-to-fill openings.
Finding people is easy, but finding the RIGHT people is not. YES Partners helps companies FIND the right people for all company functions, across many industries and globally.
