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A BOTTOM LINE RESOURCE
The most obvious benefits of a good orientation include such things as a measurable increase in productivity, reduced errors and injuries, and blossoming morale and loyalty.
But just as important and often untapped, a properly designed and professionally delivered orientation will help cut back on one of the most draining and unnecessary financial bleeds---turnover.
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WHAT TURNOVER REALLY COSTS YOU
Turnover is insidious. It's a burden to a company’s Profit and Loss sheet and the cost is typically invisible, spread across the organization or absorbed in overhead.
But one thing is for certain, the costs are much greater than most firms believe.
| Here are a few measurable costs, whether employees leaves on their own, or whether they are asked to leave because their performance is unacceptable: |
| $ |
Exit administration and interviews |
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| $ |
Separation pay and obligations |
| $ |
Increase in unemployment premiums |
| $ |
Vacancy costs and increased overtime |
| $ |
Advertising |
| $ |
Selection and hiring |
| $ |
Retraining |
| $ |
Overtime costs while the position is vacant |
| $ |
Etc. Etc. Etc. Etc. Etc. Etc. |
| But there are also harder-to-measure costs: |
| $ |
Lost productivity while the position is vacant |
| $ |
Write off of investment in training and the evaporation of corporate knowledge invested in departing employee |
| $ |
Downtime |
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| $ |
Strain on managers, other employees, and departments until a new employee is hired and trained |
| $ |
Overhead and facility costs |
| $ |
Etc. Etc. Etc. Etc. Etc. Etc. |
And the longer a position is vacant, the more the costs soar. |
SOMETIMES A YEAR'S SALARY
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Organizations may spend upwards of a year or more of an employee's salary to replace that employee.
At minimum, even entry level employees can cost an organization $10,000 or more every time one is replaced.
If you could cut turnover by even a little, your bottom line will improve. |
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ORIENTATIONS CAN HELP CUT TURNOVER
One problem that triggers resignation or terminations is an employee's failure to understand what to expect and what is expected.
Small misunderstandings can lead to little problems. Soon little problems escalate to devastating morale, slack attitudes, and poor performance.
| Orientation can help set and manage employee expectations. A well-designed, mission/values based orientation can reduce turnover by: |
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Creating unambiguous standards |
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Making employees aware of their role and value to the organization |
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Providing tools and criteria for competency and success |
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Creating a positive and supportive work environment |
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Aligning the new employee to the organization's mission and values. |
By increasing skills and morale, orientation can decrease turnover, sometimes a little, sometimes a lot.
If you reduce turnover by even a tiny percentage, chances are you will recoup the cost of orientation almost immediately. And each year from then on, you will actually contribute to your bottom line. |
CALCULATE YOUR TURNOVER COSTS
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That diabolical miscreant, turnover, quietly absorbs profits through direct and indirect costs.
Contact us for a more comprehensive analysis of your rehire costs, but for now, just use your gut plus some of the suggestions listed here, to estimate your turnover cost per employee. |
Use this calculator to see how much you can save if you can cut even a portion of your turnover.
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