One challenge businesses face is employee turnover: Time and resources spent getting a staff member up to speed can vanish quickly when that person decides to pursue other opportunities. It’s been reported, for example, that it can cost more than 30% of an annual salary to replace an entry-level employee – and even more for higher level positions.
As experienced financial professionals, Forbes Finance Council members offer advice on how you can safeguard your business from financial loss due to employee turnover or high insurance premiums. Find their suggestions – from changing how you address employees to how you onboard new hires – below.
Clockwise from left: Elle Kaplan, Ismael Wrixen, Ryan Marquis, Geoffrey Madsen, Domenica D’Anna, Sasha Orloff, James Murphy. All photos courtesy of individual members.
1. Invest In A Lengthy Hiring Process
Especially with lower-ranking positions, it’s tempting to just find a body to fill a seat. When you account for the insane costs of employee training and turnover, you’ll start to realize that it’s well worth the investment for an extensive hiring process. Even though it takes up plenty of my time, I thoroughly vet each potential employee with multiple interviews and tests to avoid high turnover. – Elle Kaplan, LexION Capital
2. Create A Training Program
Many companies do not have formal onboarding and training processes. But let’s say, for example, that you had a six-month training program. During that time, your new hires would learn what your company is about and what their responsibility would be. If you gave them the option of leaving after six months, you know it wasn’t a good fit. If they stay, they’ll likely stay for longer. - Ismael Wrixen, FE International
3. Use Quarterly Audits
A business is always in flux. Employees, assets, profit margins and most other aspects are always changing, and it affects how you need to be covered. Use quarterly audits to keep track of the shifting landscape of your business and stay in constant contact with your insurance broker to make sure coverage is still in line with what your company needs when changes occur. – Ryan Marquis, Plastc, Inc.
4. Create A Culture Of Stability
High turnover is a warning that something more fundamental is wrong. Maybe you are hiring the wrong people or your training and daily processes aren’t clearly defined. These are the symptoms of risk that can affect insurance premiums. If your culture cultivates values that drive stability, then you will experience less operational risk and that will be reflected in your insurance premiums. – Geoffrey Madsen, Santa Fe Trust
5. Refer To Your Employees As Teammates
Help the employee learn and grow into the best version of themselves. Start by calling them a teammate, instead of an employee. Pave a career path for them at your company rather than trying to squeeze them into a mold. For premiums and other costs, certain PEO organizations like TriNet can help save you from fines and fees that a small business may be unaware of. – James Murphy, EquityNet
6. Enhance Onboarding
Three small tips to enhance the onboarding process: First, provide them lunch buddies every day for their first week, so they feel welcome. Second, help them understand how they fit into the company’s goals or mission. And third, make sure their first project is an easy win for them and the team. They will start their tenure feeling like shared part of the company’s success. – Sasha Orloff, LendUp
7. Make Employees Feel Valued, Acknowledged and Challenged
Employees stay when they feel valued, acknowledged and challenged. While you can’t guarantee that your team will stay with you forever, you can prevent frequent turnover with these three steps: Always engage with your team, hold your team accountable, and achieve major goals together. – Domenica D’Anna, Supreme Lending