Posted in:Talent Management
No matter your industry or business model, one thing is certain among all businesses: the need for the right people. As soon as you move beyond the sole proprietor stage, people begin to play a key role in the strength and development of your business.
It can not be said enough. People can be the difference between doors of opportunity opening or the demise of your business dreams. Hence, it is important to take the time to plan how you will manage and treat each person on your team whether it is your first hire or your thousandth hire. It is people who will take you to new heights of achievement or dig the deepest holes that you will have no idea how to climb out of despite all efforts. So, please heed our cautionary advice.
The Cost of Turnover
One area that receives a lot of attention is employee turnover, which can take the form of a resignation, termination, or retirement. Regardless, you will experience times when you have open seats on your team. In these cases, it is important to understand there are both direct and indirect costs associated with filling those vacancies.
Hard costs may include paid job advertising, hiring a recruiter, and/or paying out a signing bonus. Additionally, human resource labour hours come into play when you consider the time it takes to conduct interviews, provide training and orientation, and process paperwork. If you are mindful of these activities and their associated costs, you will be able to calculate the cost of hire for each position in your own company. It can be insightful information that can help you change your recruitment tactics.
Estimates vary depending upon industry and position level, but tend to range between 25% and 200% of the position’s salary. Even on the lower end, this is not an insignificant amount of money and should be taken into account when engaging in workforce planning and staffing activities.
Another important area that is often forgotten is knowledge management. As more companies rely on specialists to fulfill key role responsibilities, it is critical to create a method for knowledge storage and transfer. It may seem efficient to have a Subject Matter Expert as the sole point of contact on a day-to-day basis to take care of different situations, it can be extremely detrimental when that person leaves their position. Do not be complacent and take the time to safeguard this specialized knowledge. Otherwise, you may find yourself back at square one starting over again.
It is a gargantuan endeavor to document work processes, but it is definitely worthwhile when you find yourself in a state of flux with people moving in and out of your business on a regular basis. These departures may be good or bad in their own right, but how to handle the aftermath is where you can strengthen your business for the long term. Few people regret being proactive, but there are hordes who regret being reactive. Prevent the pain and put in the hard work, so that you can reap such rewards.
Protecting Intellectual Property
Once you have a knowledge management structure in place, you must take the time to protect it. Again, it should not be person-dependent, otherwise you run the risk of proprietary knowledge walking out the door with your departing employees. For example, you can institute strong confidentiality agreements into the working relationship which will set the tone for how you want proprietary information managed. These efforts coupled with a culture steeped in deep trust and respect should help you safeguard your intellectual assets.
Speaking of which, do not forget to make the effort to maintain the strength of your culture. Though the individual actors will change with each employee movement, this cultural glue is what keeps each disparate employee together as a solid work unit. Building culture should start at the very foundations of your business when you first start. It does not need to be packaged in a beautiful manner at the get-go, but it should be very evident from the start. If you need help to start on the right footing, please reach out to ask questions. Our team at Honiva Consulting would be happy to point you in the right direction, so you are successful in developing your team. We love seeing businesses succeed!
Here to Help
For further details on how Honiva can help you prepare you during your recovery and rebuilding, please view our service offerings. We also welcome business owners to attend our next online seminar to learn how to improve employee management practices and strengthen your company long term. Register for the free HR Education session at EventBrite.