How Much does it Really Cost to Replace an Employee?
Replacing employees — good employees — can be very expensive. I think we all know that.
All the time the hiring manager has to spend recruiting, interviewing and bringing up to speed a new employee. Recruitment fees. It can get expensive. Consider these costs you might not have thought of (from an article in About.com):
- Time to review resumes
- Time to interview candidates
- Interview expenses for candidates
- Possible travel expenses for new hire or recruiter
- Possible relocation expenses for new hire
- Additional bookkeeping; payroll, 401k, etc.
- Additional record keeping for government agencies
- Increased unemployment insurance costs
- Intellectual property lost
- Corporate history lost
The article quotes one source that claims it costs $58,000 to replace a customer service rep earning $18,000. Regardless of whether you agree with those numbers, I think you’d have to agree that replacing employees is expensive.
So just remember that the next time you get a little aggravated and are tempted to lose your temper over something one of your employees forgot to do or a task completed a little sloppily. Consider that the cost of coaching that employee and working with him or her to develop better skills could be a much better financial decision.
