Women at Work: Replacing workers can prove costly
Living in a small town with many manufacturing plants in the area, I have observed the difficulty employers face when it comes to getting applicants in the front door.
In Express Employment Professionals’ fourth quarter 2018 Job Insights survey, 79% of businesses surveyed said that it was “somewhat” or “very” difficult to fill open positions. In our current labor-short job market, skilled job seekers have more options than ever, so retaining top talent has become a vital component to maintain a productive, successful business.
Studies show the actual cost to replace an employee is significant. Depending on a variety of factors — including skill level, education, and experience — the total cost of turnover can be as high as 150% of an employee’s annual salary.
Assume the average salary in your company is $50,000. That means every time an employee leaves, the cost to replace them could be as high as $75,000. Now, multiply that number by your average yearly turnover, and you can see how quickly it adds up.
So, where is all that money going? To truly gauge the impact of employee turnover, you must consider the cost of:
• Advertising open positions.
• Time spent interviewing candidates.
• Time spent on reference checks.
• Onboarding a new hire.
• Training and development.
• Interim loss of productivity.
• Lost knowledge from exiting employee.
• Overworked core staff due to turnover.
• Impact on company culture.
Staffing companies are in the business of helping employers shoulder the burden of maintaining an efficient, productive, and skilled workforce. The true value of staffing companies and the services they provide go far beyond simply hiring a temporary employee.
Access top talent
Because they’re only as good as the people they place, successful staffing companies build extensive pools of talented workers by constantly recruiting. From online advertising to social media to referrals from current associates, staffing firms have a wealth of resources that are hard to match. So, your company doesn’t just have access to candidates in your own industry, but across a wide range of disciplines, ensuring you are able to connect with the best of the best.
From exiting employees to increased workloads, there are a variety of factors that take a toll on productivity. Staffing companies are a powerful ally in maintaining a productive workforce. From providing temporary employees to bridge a gap or leading the search for a full-time replacement, with the right staffing partner, the work doesn’t have to stop.
From reducing overtime hours for your regular full-time employees to expenses associated with training new workers, there are a variety of ways staffing companies help reduce many of your biggest business expenses. In fact, the most significant value may be created by freeing up valuable HR resources spent managing workers’ compensation, payroll, benefits, unemployment insurance, and many other employee management-related tasks.
Fluctuations in business volume are common challenges for most businesses. Staffing companies allow you to adjust your workforce according to your specific business needs. You’re able to scale your workforce up or down as necessary with additional workers when you need them, and only for as long as you need them.