The following is a comprehensive checklist of items to include when calculating the cost of turnover in any organization. To determine the costs, have the hourly and weekly cost of fully loaded payroll costs (i. e. salary plus benefits) of the vacant position, the management staff, the recruitment staff and others as outlined below. William G. Bliss, President of Bliss & Associates Inc. , reminds that at least there are six kinds of costs in relation to employees’ turnover. They are as following: a) Costs Due to a Person Leaving b) Recruitment Costs c) Lost Productivity Costs d) New Hire Costs e) Lost Sales Costs
(Bliss, 2004) In one occasion, the costs of employees’ turnovers ...
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...might be far greater than the costs to replace them. However, given the high cost and impact on running a business, a well thought-out program designed to retain employees may easily pay for itself in a very short period. 5. Employees’ Retention: Providing Attractive Compensation Dean and Mary Tjosvold in their book titled Psychology for Leaders: Using Motivation, Conflict, and Power to Manage More Effectively point out that “Top management sets policies; managers make decisions and solve problems; and employees do their assigned tasks” (1995).
It is clear from the sentence above that top managements are responsible to create a healthy working environment including paying what their employees deserve. While it certainly takes more than money alone to attract and retain skilled professionals, it is helpful to offer competitive compensation packages. To aid in their retention and recruitment efforts, businesses of all sizes are paying close attention to employee compensation. Following are five elements found in many compensation packages (Weinberg, 1999):
? Base pay, the foundation of most packages, is the fixed portion of salary employees receives for performing standard job duties. ? Performance-based pay had grown more popular with firms interested in recognizing exceptional performance without raising fixed costs. ? Equity-based compensation is designed to retain staff over the long term and has gained in popularity as a recruiting tool with the increased use of stock options. ? Benefits packages are becoming more progressive. It includes pooled vacation and sick time, employee concierge services and financial planning are being offered.? Reward and recognition programs – including bonuses, extra time off and professional development opportunities
Berta, Dina. (2003). Chains Tap Psychological Profiling to Trim HR Turnover. Retrieved April 28, 2008 from http://www. findarticles. com/cf_dls/m3190/39_36/92458899/p1/article. jhtml Bliss, William G. (2004). Cost of Employee Turnover. Retrieved April 28, 2008 from http://www. isquare. com/turnover. cfm Choosing a Method to Attract Candidates. (2005). Retrieved April 28, 2008 from http://www. hru.
uts. edu. au/recruitment/attracting/methods. html Daniels, Aubrey. (2000). Replacing Bad Employees. Retrieved April 27, 2008 from http://www. entrepreneur. com/article/0,4621,277465,00. html Hauenstein, Patrick. (2000). Using Technology to Get the Best Employees. Retrieved April 27, 2008 from http://www. advantagehiring. com/newsletter/0600/n0600_hau1_dist. htm HRM Guide Network contributors. (2007). Recruitment and selection. Retrieved April 28, 2008 from http://www. hrmguide. co. uk/hrm/chap8/ch8-links1. htm#ch8-mar