Dwight SchruteIn my first big-girl job ever, I quit; but, I was also let go. Let me explain:

I had enjoyed my professional job as a marketing coordinator for some time, but was pretty upset when I got passed over for a promotion (seven months into my tenure, ah youth) and an unqualified person received the gig instead. I was frustrated but soldiered on. However, when a few weeks later, I was approached to be part of a startup staffing firm, I jumped at the chance, feeling both undervalued and frustrated at my current job.

When I went to give my two months’ notice at the investment firm, they asked me to stay, let me work two more days and then asked me to pack my things and leave. I was shocked and hurt and confused.

The point of the story is this. Whether an employee quits or is “let go”, it sucks for everyone involved. High turnover has more than a personal cost, it costs organizations real money. A survey done by American Progress found:

  • For all positions except executives and physicians—jobs that require very specific skills—across the remaining 27 case studies, the typical (median) cost of turnover was 21 percent of an employee’s annual salary.
  • For workers earning less than $50,000 annually—which covers three-quarters of all workers in the United States—the 22 case studies show a typical cost of turnover of 20 percent of salary, the same as across positions earning $75,000 a year or less, which includes 9 in 10 U.S. workers.
  • Among positions earning $30,000 or less, which includes more than half of all U.S. workers, the cost of replacing an employee is slightly less than among positions earning less than $75,000 annually. The typical cost of turnover for positions earning less than $30,000 annually is 16 percent of an employee’s annual salary.

While the cost may change with the type of position, the very least it will cost the organization is roughly 21 percent. When factoring in direct and indirect costs, the numbers go even higher (see the full study here).

So how can companies prevent this costly and (not very fun) issue? There are some options, but, like any solid business process, they take time.

Figure out what your organization’s specific numbers are. By taking your company’s salary information and turnover rates and comparing them with your industry numbers, you can get a pretty good idea of not only where you stand but how much it’s really costing your organization. In this process, this is the very first step. Knowing your personal numbers creates the urgency to put programs in place and the potential motivation for funding from higher-ups.

Remind other teams that HR has no crystal ball. If marketing or operations is launching a new initiative that will require HR to ramp up hiring, you need to know about it. But those departments may not know you need to know, you know? So let em’ know!

“Suppose I’m a bank and I need to be hiring people into my call center,” Pollak explains. “When I forecast how many loans we expect to originate or how many new customers we expect to gain as the result of a new marketing effort, I’m also considering the people implications of this growth. … I don’t get into a situation where the loan origination partner approaches the HR manager and says, ‘Oh, by the way, we just launched a new set of offerings in the marketplace, and you’re going to need more bodies to handle a whole bunch of calls on this starting tomorrow.’ “

So who is your Dwight? Dwight Schrute, of NBC’s The Office, is a total creep. He is also a great Dunder Mifflin employee. So is Jim. A smart HR person would pay attention to the qualities that those two employees share when looking for new people to fill its positions. Do you have an ideal employee profile? Then how do you know what one looks like?

Recalibrate. Let me shake your hand. You, an HR professional got through a pretty tough recession. Congratulations. So did your employees. One of the reasons that so many people are starting to see high turnover now is because this sort of output is not sustainable. Sure, in times of crisis workers can band together and do the work of many, but that can’t last forever.

…they were seeing a lot of missed deadlines, burnout, and turnover beginning to creep up. As we dug deeply into their staffing we realized that their problems stemmed from 2 incorrect assumptions – 1) that people were accomplishing their workloads post-recession in 40 hours and 2) that there was no price for this “extra effort”.

You do yourself, your executive team and your employees a great disservice if you do not take this into account when planning out your workforce for the next few years.

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