How many people have quit their job at your office lately? How many did quit the last year? Do you know how long it takes to replace good quality workers? Did you know that you can save money and increase efficiency by increasing your salary? I do strongly believe that money should be no object in your choice of work. And I believe if you give it your best, the money will follow. Your company on the other hand, need to be attractive in the market of the best employees, the salary do help out in this field.
Metallic White Inc
Let’s say your company: Metallic White Inc has 100 employees. The average salary is $45.000. During the last year 50 people got replaced. They either got promoted or quit. In this company it takes one month to be able to do the work good enough to do it on your own. It takes six months before you are fully effective.
The cost of replacing this person will be: $ 22500 six months of salary for the new and for the one in charge of training. The cost of replacing 50 people, costs $ 1.125.000 a year. What if you gave your employees a pay rise of $5.000? That would cost you $250.000 a year. If it reduces the turnover by 50 % you will save $562.500 a year, giving you a benefit of $312.500 a year. This is only a simple example, and the other benefit is that you will keep your employees around for much longer, increasing the all over experience by a mile. Depending of type of job, and work load you might increase productivity by 10 -20 %. A 12 % increase at my office would be equal to hiring two people. This increase in productivity has a great value not often calculated.
Other cost you would save is recruiting costs, saved time in job interviews. There is actually quite a lot to save.
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What is the result for your company?