employee retention and turnover. costs associated with hiring a new employee recruiting...
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Employee Retention Employee Retention and Turnoverand Turnover
Costs Associated with Hiring A New Costs Associated with Hiring A New EmployeeEmployee
Recruiting (Advertising, Reviewing Resumes and Applications, etc.)
Interviewing Hiring (printing name/security
badges, running background checks, drug testing, etc.)
Training (Books and Materials) Reduced productivity (Salaries for
those who have to stop their day to day responsibilities to perform all of the above functions)
How Much is it Really Costing?How Much is it Really Costing?
SHRM, the Society for Human Resource Management, estimated that it costs $3,500.00 to replace one $8.00 per hour employee when all costs were considered. This was the lowest estimate of respected companies who calculated this cost!
Other Source EstimatesOther Source Estimates
It costs the company 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees!
Quick CalculationQuick Calculation
Think of a job in the hospitality industry, perhaps a supervisor or manager. Let’s estimate their replacement cost.
Average Annual Pay for a Average Annual Pay for a Manager or SupervisorManager or Supervisor
$50,000 $50,000
X 1.25X 1.25(125% of their annual (125% of their annual
pay)pay)
Replacement CostReplacement Cost
$62,500$62,500 This means it costs $62,500 to This means it costs $62,500 to
replace just one supervisor. If this replace just one supervisor. If this company loses ten supervisors a company loses ten supervisors a year, then 10 times $62,500 year, then 10 times $62,500 equals $625,000 in replacement equals $625,000 in replacement costs for just supervisors. costs for just supervisors.
The Bottom LineThe Bottom Line
Our industry is very competitive!Our industry is very competitive!
If our employees don't trust us to treat If our employees don't trust us to treat them fairly and respectfully, they will them fairly and respectfully, they will leave us. leave us.
Our employees will go to other hotels Our employees will go to other hotels and restaurants in hopes of better and restaurants in hopes of better treatment. treatment.