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If you have ever been involved with a bad hire, then you know the importance of a well-planned and thorough recruiting process. And, if you have ever been involved in developing this process, then you know the time and energy involved in recruiting and on-boarding new team members.
Most inexperienced entrepreneurs, however, do not fully understand the time and energy needed to properly hire great employees and, more importantly, the underlying cost associated with keeping talent.
A new infographic by Paycor.com illustrates the business costs associated with employee turnover. This issue is even more important today, as the US unemployment rate continues to stay at a 50-year low, around 3.7 percent, which has been fueling the increasing incidences of "ghosting" -- when an employee is hired but never shows up for work or simply stops showing up after starting.
While the graphic is below, here are a few important takeaways entrepreneurs need to consider:
Costs associated with employee turnover will increase 13 percent to $680 million from 2018 to 2020.
The cost to replace an employee can cost a company between 13 and 20 percent of an employees yearly salary.
These are significant costs, especially for small businesses trying to expand or get traction. So how do companies reduce employee turnover, even in the face of more competition for employees? Beyond paying more -- which most entrepreneurs cannot do -- many companies are turning to programs that invest in employees in other creative ways, such as:
Flexible and remote work opportunities
Paid time off for volunteer opportunities
Professional development and leadership programs
Mentorship programs
Cross-departmental training
Childcare option
Retirement coaching
Overall, programs that promote workplace culture and support employee wellness through physical, intellectual and emotional development can cost the company, but the return on that investment in terms of retention and productivity will far outweigh any financial cost the company many incur.