How Much Can One Person Cost? (continued)
by Miki SaxonThis is a continuation of yesterday’s post.
The cost really starts mounting up based on what leaves. Yes, of course, the person in that position matters, s/he was a unique individual with a unique set of skills—that can’t be duplicated, but it can be replaced. But the loss of a certain position at a certain time can wreak corporate havoc costing millions. For example:
- The engineer whose missing piece of the project delays delivery and launch of the product.
- The product marketing manager tasked with a new product launch.
- The admin no one noticed or worried about, who, in actuality, was both the department glue and grease.
Notice there are no senior managers listed. Think about it, if the VP of engineering leaves it may garner comment in the media and create headaches for the CEO, but it won’t delay the product.
But is turnover really as bad as I’m making it out? And if it is, can there really be enough ROI to offset it? I can almost hear the skepticism (and worse) echoing through cyberspace.
Frederick Reichheld, founder of Bain & Company’s Loyalty Practice and author of Loyalty Rules!, and other loyalty books, shows in carefully researched studies that a 5% improvement in employee retention translates to a 25%-100% gain in earnings.
So there’s your proof!
The solution overview I promised can be summed up in two letters, CC—culture and communication—and one guiding principle: People who join your company for money, will leave for more money.
I’ll elaborate on CC next week, but the principle needs no explanation, it speaks for itself.
Have a great weekend!
