SMB’s and Employee Contribution

November 11, 2008

With the current economic climate, a good article by Karen D. Schwartz at eWeek Midmarket;

The article dives into performance indicators and metrics that can be key for smaller organizations in the SME space to be watching.

One metric she mentions is the high cost of turnover;

Let’s say your number of employees grow every year by 5%. On the surface that looks really good, but if you’re losing 20% of your employees every year and have to rehire now 25% you are incurring incredible expenses having to do with administration, retraining and separation,”

The only thing I caution when just looking at pure turnover, is why that turnover is there.

I worked at an organization that actively helped, and encouraged entry level employees to improve their skills. Borrowing from the old Tom Cruise movie title, informally the team were the Top Guns.

Yes, entry level position turnover can be high.

But if that turnover is into higher value places in the organization – it can be a benefit to you.

The hiring cost of more senior positions will be higher, plus the newly transferred employee needs far less retraining to get comfortable in the role.

Not to mention that the esprit de corp makes finding the replacement for the entry level position a lot easier.

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