Cost of recruitment or a Price for being nice

IMG_4192 (2)Once I met a boutique shop Manager. She just left a high end store to work for a local designer. On my question: “Why did you leave that place?”. She answered: “… they didn’t look after me. I was their best sales person, but I had no incentives, no “thank you” at the end of a working period, no appreciation, only plans to meet. Felt like they were using me.”

And I thought “why would people want to leave their employer if they got paid for what they did? Isn’t the whole point of work to get money you agreed on for a service you agreed to provide?”

I started to think and did my research.

It is not a secret that happy workers are 12% more productive than unhappy and more willing to stay after hours; they do extra work too. Unfortunately there are only 30-33 per cent of such happy workers. So 70% of workers are working on their 88% of capacity. That’s too much money to loose.

Find a new employee is an expensive exercise. Not only that their’s cost involved in the process of recruitment alone: advertisement, time of the internal recruiter, time of the person conducting interview, background checks and various pre-employment assessment tests. Studies show that “an average cost to replace an $8 per hour employee, determining an average cost from $5505.08 to $9444.47 per turnover.” “Chartcourse estimates it costs $40 000 on average to replace a nurse, while technology companies can run replacement costs of more than $125 000 per vacancy,”-says Financial Review. Studies like SHMR predict that it costs 6 to 9 months salary on average. That is a cost of training and speed and quality of performance.

What if an employee doesn’t need to leave? The other option is an internal promotion, which costs almost nothing to a company and brings more benefits not just for customers, but for other employees too. But sometimes it might be not an option at all. People have to or should leave a place and new blood has to enter the veins time to time, but holding on to a right person is a very necessary exercise, because it cuts costs for a company and gives stimulation for others. I’m not even mentioning the appreciation from employees, new ideas, faster up to speed performance and extra effort too.

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And here I remember another story from another industry. A Company didn’t want to employ anyone to fill up a position, they decided to wait for a the right person. When that person came in, they checked him in every possible way. He got offered a position as Sales Rep. A few days later he got to know, that he had to undergo a surgery which he might not survive after all. Besides, it might lead to complications and long recovery. He notified the company and said that he is sorry that they went through all that trouble. This company decided to leave the offer open and wait for the result of that operation. Kind? Wait a bit…

A day or two before the operation he was invited into the office where the director arranged a welcome lunch for him and gave that guy not only a signed contract which would cover his sick leave, but also a premium insurance for every occasion and family support.

Nice story? You would say that a right person deserves it? Surely, he deserves it even if they don’t know yet his performance, KPI and communication style? What do you think, does a person who has been working for a company successfully deserve acknowledgement too then? Yes? And even that person, who leaves after 3-4 years of employment deserves a “thank you” gift for all the money saved and the progression of a company? After all, knowing that average job change in Australia is 1,5 years, 4 years of employment history saved a company at least 6 to 12 salaries.

6 to 12 salaries? Well, in my case it was an email saying, that I was “one of the best employees they have” and that I  “will be truly missed” plus an offer to catch up if I want.

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