Investing For Growth

Sydney Hunsdale, ConsultantFormer Global COO Razorfish and CFO Vivaki, EMEA

Bottom line improvement

Reduces employee turnover

Increases performance

and productivity

More competitive

Operate more efficiently

Achieve greater growth

Deliver more profit

ROI can range anywhere from 20 to 7000 %

Greatest

Potential

Asset

Greatest

Potential

Liability

 

Largest single financial drain

Cost of Turnover

£4 billion annually

£184M in Media & Advertising

£1.9 billion in IT and Tech

20 weeks to 7 months to reach peak productivity

RecruitingInterviewing

AdministrationTraining costsLeaving costs

Lost productivityTemporary coverage

Higher comp package Overworked remaining staff

Lost knowledge Strained client relationships

TURNOVER

Realisation that your asset has become an asset of your competitor

True Cost Impact

Entry level – 30-50%

Mid-level – 150%

Exec & specialty 200-400%

Example:

Average cost of turnover at 100%

Average salary of £40,000

1000 employees; 20% turnover

£8 million annually

Costs are largely hidden

Doesn’t hit profit and loss statements

Not in the budget

Not accounted for on a line in the p and l

If that were true, management would certainly take more notice

 

While many leading companies place more effort on employee

retention, many remain clueless. They accept employee turnover as a

normal part of doing business. I believe our industry is guilty of this.

16

RECRUITMENT REALITY

1,400

Acquisitions/Other +67 Leavers (36%)

1,200 443

328 Dec 11 Headcount: 1,084

1,000 Net 2011 Hires 175Dec 10 Headcount: 909 Recruits +49% (Net 2011 Hires excl Acquisitions: 108)

800

2011 Headcount Flow

HE

AD

CO

UN

T

To achieve an 11% net headcount growth, it required hiring 49% new staff

Tech TalentHigher turnover

Demand far exceeds supply

Cost and competition rising

High vacancy rates

Higher cost per hire

Contributes to higher cost of turnover

…on voluntary turnover

But don’t ignore involuntary

Make it a Company-Wide Effort

Hire the Right People

Increase Your

Leverage

UnderstandWhat

MotivatesThem

Be Transparent

Beat the Competiton

Engage Your Employees