Taking Action eNewsletter

Hidden Profits

Issue Eight

                                                                                                       “I left because my skills and knowledge           “I left because no efforts were being made                               were not being fully utilized”                           to improve the work environment"

Controllable attrition caused by ineffective hiring practices, inadequate training, poor supervision, and a negative work environment will cripple your organization’s effectiveness and will impose an invisible, ongoing cost that never seems to go away. The first step to finding this hidden profit is to calculate the true cost of attrition by considering the following: 1. Sourcing costs: These include administration of the termination and recruitment functions and the costs associated with attracting, testing, and interviewing applicants. 2. On-boarding costs: These include administration of the induction function and the costs associated with orientation, mentoring, and initial training. 3. Productivity costs: These include hidden costs associated with lost productivity of employees prior to leaving and the negative impact of new, less experienced employees on productivity. 4. Morale costs: These include erosion of the morale and stability of those who remain employed. Stayers may denigrate their present position in the light of better alternatives and begin contemplating other employment. 5. Quality costs: These include the impact that disgruntled employees, who have decided to leave, have on customer service and the impact of new employees who provide less competent or less personalized service because they do not know customers or can’t meet customers’ expectations due to their lack of knowledge and experience. Although some of these costs are obviously difficult to estimate, helpful “attrition cost calculators” are available to guide you through the process. To download a particularly thorough cost calculator click here. The work we have done in this area validates the popular rule of thumb that the cost of one termination is at least that person’s annual compensation (salary plus benefits). If you will take a few minutes to calculate the cost of controllable attrition for your company, you will realize that investing in improved hiring and on-boarding practices is one of the best investments you can make. To learn about specific tactics and tools our clients are using to reduce their controllable attrition contact Susana Pando-Taupier to schedule a conference call with me. Susana can be reached via email at: susana@thedougwilliamsgroup.com. I hope this issue of Taking Action has been helpful to you. If you have any feedback on this issue or suggestions for future issues, please contact me at: doug@thedougwilliamsgroup.com Best personal regards, Doug Williams President The Doug Williams Group, Inc.