In today's small businesses, employers are not only having a hard time attracting employees, but are also having a difficult time keeping them. Employees leave for a variety of reasons, including poor supervision, unchallenging positions, limited advancement opportunities, lack of recognition, limited control over work, perceived pay inequity, and the perception of more favorable opportunities in other companies. High employee turnover is one of the greatest causes of declining productivity and decreased morale in corporate America. Cost of turnover that can be measured directly fall in two areas: separation costs and replacement costs. Separation costs may include severance pay, expenses associated with an exit interview, outplacement fees and possible litigation related to involuntary separation. Replacement costs are hiring fees, including sourcing expenses, Human Resources processing costs for screening and assessing candidates. Other Human Resources cost include the time spend by hiring highly qualified employment consultants interviewing candidates, travel and relocation, signing bonuses if applicable, orientation and training. While morale decreases, recruiting and training costs increase and an organization can find itself in a vicious cycle. Therefore given the high percentage of employees who plan to seek new employment opportunities as the job market rebounds, Human Resources professional and small business owners need to understand the turnover's costs impact and focus on ways to keep their best employees on board. The retention of employees is a major concern for smaller organization. About 25 percent of the 38 companies reporting employee-retention problems had 1999 sales of $10 million or greater: the balance is smaller organizations.
...