The following article wrtitten by Katherine Graham-Leviss was published in Entrepreneur.com on Thursday 29th September.
“Top people are always in demand. Losing them to a higher bidder or a more lucrative job is too easy to be taken lightly.
The cost of hiring a new employee for any position is significant. The many formulas that calculate such costs vary widely, but can range upward of 200 per cent of an employee’s annual salary. That includes not only the tangible costs of severance pay, vacation accrual, job advertising and recruiting fees, but also indirect costs such as the staff time needed for paperwork and recruiting, and orientation and training for new hires. Other hard-to-quantify costs can include customer dissatisfaction, poor employee morale and loss of revenue during transitions.
Let’s assume the average salary in a given company is $50,000 a year. If the cost of turnover is 150 per cent of salary, then the cost would be $75,000 per departing employee. For a company of 100 employees with a 10 per cent annual rate of turnover, the annual cost of turnover would be an estimated $750,000.
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At Brownie Points we agree with this view…
Staff motivation, engagement and inspiration are a low priority for many employers, but when the cost of staff turnover is clearly identifiable the argument for change is extremely powerful.
Brownie Points reward and recognition software was launched to help organisations monitor and improve their KPIs.
With examples such as the one above, implementation of a well designed reward and recognition program focused on corporate KPIs can have a significant positive impact on a company’s bottom. Executed effectively, a reward program can improve morale, increase productivity, reduce staff turnover, improve sales and pay for itself many times over.
