If you're losing people, you're losing money.
The rule of thumb on turnover cost in the construction industry is 16%-20% of annual salary. So when your $75,0000 project manager walked, that cost $15,000. How so, you say?
Here’s a rundown of the costs associated with employee turnover:
Separation Costs – exit interviews, severance pay, higher unemployment taxes | Vacancy Costs – overtime for other staff, temporary staffing | Replacement Costs – advertising, search & agency fees, screening applicants, physicals & drug testing, hiring bonuses, applicant travel, relocation costs | Training Costs – orientation, certifications, on-the-job training, safety equipment | Additional Costs of New Employee– learning curve, reduced quality, errors, material waste
It adds up...
Whatever the reasons for turnover in your company, if it’s more than the occasional one-off employee leaving then it’s costing you money and causing problems on the jobsite. Problems you can’t afford. But how do you fix it?
The good news is there are a number of ways to address the issue of high employee turnover. The not-so-good news is there’s no quick-fix.
A review of your recruiting, hiring and onboarding policies and practices is the place to start and as someone who’s done all of the above for a living I can tell you it involves much more than running an ad and conducting a few interviews. The overall trend for open construction jobs has been increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.
If you’re ready to get a handle on revenue lost through employee turnover, I’m here to help. Let’s get the ball rolling – call to schedule your business diagnostic consult today!