One theory about unskilled and low skilled employees argues that when you lose a worker, for whatever reason, you can always find another body to fill the spot. While that may be true, that turnover costs your company money.
Synergistic Organizational Solutions completed a study which showed the real cost of employee turnover. SOS looked at a manufacturer with 400 production workers starting around $6.50 an hour and came up with these telling statistics:
- $74 is spent hiring each employee-before the worker even clocks in.
- It takes an employee three months to learn the job well enough to produce more than he is costing the company.
- At nine months, the company breaks even on a new employee-the worker’s productivity has paid for the costs of employment and becomes income for the company.
“Small businesses with relatively unskilled workers had looked at turnover as a normal part of doing business,” says Sandra Kay Neal, founder and president of SOS. “They need to recognize that turnover is a lot more costly than they had previously thought.”