Will people jump ship if the green shoots of recovery appear?
How much will that cost your business?
A while ago CIPD came up with these figures of replacing people.
“On Average” it costs £17k to hire and replace a good manager who leaves your organisation.
That figure dropped to “On Average” £7k to hire a new individual contributor…
We think these numbers are very very conservative . We’d like to encourage you to come up with your own numbers.
Here are some of the factors that we think you should consider to come up with your specific numbers.
- Cost of hiring someone via a recruiter
In some industries that is 30% of first year salary
- Cost of Job Boards + Classified Ads Career Fairs/ Misc
- Cost of time spent sourcing resumes
- Cost of Time Spent Reviewing 1 Resume x Ratio of Resumes Reviewed per Phone Interview
- Time Spent per Phone Interview x Ratio of Phone Interviews per Person to person Interviews
- Cost of Time Spent per Personal Interview x Ratio of Personal Interviews per Realistic Job Preview (or 2nd Interview)
- Cost of Time Spent on Realistic Job Preview (or 2nd Interview) x Ratio of Job Previews (or 2nd Interview) per Offer Extended
- Time Spent Preparing an Offer
- Cost of taking up references / background checks
- Number of Offers Accepted
- Costs of training a new person
- Management time to On-Board that person and get them up to speed.
- How much less productive is a new employee in first year vs previous experienced employee?
Using these numbers what is your total cost of replacing a good manager and a good performer?
Remember these people may have left because they didn’t feel appreciated, recognised or developed or could see no career path.
We think it would be a great exercise to work out YOUR numbers..
We’d be very interested in hearing from you too.
We also think that when there is a discussion about whether it’s worth training your managersto
- Hire the right people
- On-board them successfully
- Performance Manage them
- Spend time and money rewarding , recognising and appreciating them…
We think this would be a good time to get these numbers out and add those to the discussion too.
Then make the decision on whether there is an ROI on training.