What Is Employee Turnover Costing You? Part 3
Recruit and select the best to reduce further employee turnover.
So your employee left. Now it's time to start recruiting top talent to find that golden employee. To prevent further employee turnover, job fit is critical. Recruiting and selecting the perfect person for the job can be costly and those costs also factor in to the total cost of employee turnover.
Here are 4 general recruiting factors that add to the cost of employee turnover:
- Advertisements. No matter how you do it, big bucks are going to be spent on job advertisements. Simple classified ads and online job listings can cost several hundred dollars. Agency costs are about 30 percent of the salary for the advertised position. And even employee referral costs can reach $2,000 or more. So be prepared to advertise!
- Internal recruitment. When filling a position, looking from within the company is always beneficial. These costs include the time the internal recruiter spends to understand the position, internally communicate the job opportunity and review candidates. The interview time of both the interviewer and the internal candidate is also factored in to the total cost of recruitment and employee turnover.
- Screening. Pre-employment screening helps eliminate potentially dangerous employees and enforces job fit. These costs include background checks, reference checks, drug tests, pre-employment assessments and skills tests. This screening also prepares the hiring manager for interviews and ensures they are hiring the right person for the right job, which in turn will reduce employee turnover in the future!
- Human resources and the hiring department. These costs include the time the HR staff and hiring managers spend to: review resumes, background checks and pre-employee assessment results, conduct interviews, and select a final employee. This can add up to more than 100 hours of total time. And the average cost of processing and responding to resumes is about $1.50 per resume opened.
Yes, effective recruitment and selection seems expensive, but it's worth it. These costs are necessary to hire the best-fit employees, improve employee retention and reduce turnover.
Turnover costs don't stop here! My next article about employee turnover costs will cover onboarding expenses.
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