Know The Costs Associated With Replacing Team Members
When you lose a member of your team, regardless of their position, you can expect their departure to impact your organization’s bottom line. That’s why it’s so important to take a proactive stance with regard to staffing and minimizing your financial burden.
Start by becoming knowledgeable about the costs associated with losing, and ultimately replacing, staff. Then, develop a plan to address staffing concerns in a way that promotes a strong retention strategy and positive recruiting tactics.
Read on to discover some of the more prominent monetary and emotional costs associated with losing a member of your team.
o The obvious productivity cost accrues from work missed due to the position being left vacant. A secondary productivity cost results when others have to take time out of their days to conduct interviews, onboard new hires and oversee the training process.
- Cash Flow
o Negative impact on the organization’s cash flow could occur, for example, when you are required to pay benefits in a lump sum rather than over a period of months as originally projected.
o While referrals often result in higher quality hires, if you have implemented a referral program, there’s likely a cost associated with it. When looking for external sourcing assistance, prices vary depending on the company and the services provided.
- Market value
o Market costs relate to the “negotiation” period spent making offers to the desired candidate that are comparable to offers they may be receiving elsewhere.
o It takes about 12 months before your new team member will reach their maximum potential. Over the course of that time, a lot of time and resources will be spent getting that person up to speed.
- Bad hire
o Of course, if it doesn’t work out you may need to try again. And that means ongoing costs. Therefore, while it may be tempting to rush through the recruiting process, making a good hire will cost a lot less than having to relive the bad hire experience any day.
While the emotional costs associated with the loss of a team member are hard to quantify, they should not be ignored as they greatly impact others throughout your organization. You may never fully realize the scope of one’s relationships with their co-workers until they are gone, so you will never really be able to predict the impact their departure will have throughout the organization. Here are some emotional costs to consider:
- When a member of your team leaves, especially if they spent a lot of time with your clients, their departure may impact your organization’s external relationships.
- The urge to say goodbye may be stronger than the urge to maintain productivity. This behavior could have a ripple effect throughout the entire organization.
- When one person leaves, depending on their personality, the entire team dynamic may change. Getting back to normal could take some time.
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By Renee West, CHRM-CD, PHR (New Philadelphia office)