Labor Turn-Over Costs You Money

A Good Man is Hard to Find…and Keep!

by Linda Schmid

By Alan W. Farrant

Basic as the ideas in this article may seem, it was some good advice back in 1974. With the labor situation as it stands, it seems fitting to revisit this topic and make sure that we are all as competitive as possible in regard to keeping our employees. — RB

If employees leave you after a short time — even a year — you are in serious trouble. Because it is costing you money!

You will have a hard time holding your help, unless you meet competitive wages, working conditions and fringe benefits. You need to meet them to hold your employees.

It costs a lot of money to “break in” a new employee, even if experienced. Not only that, but the one who dealt with your customers will be missed by them —perhaps to the point of the customer also leaving. 

Face the Problem

What did labor turn-over cost you last year? How does it look this year? You may not know the actual dollars concerned, but it is obvious that new help is costly. 

When you have lost a helper, what do you do? Most likely a replacement must be made. So you look over applications you have on the desk. The few phone calls show they have jobs elsewhere. 

Depending on the skills you must have, the pay scale, your store location and general working conditions, you may have trouble getting a new employee. You can try the State Employment Service, Commercial Employment Service, Commercial Employment agencies, or a Help Wanted classified ad in the local newspaper. 

But in the meantime you have no employee for the job concerned — so other employees have to “fill in.” This takes them away from their own chores and fails to do justice to the vacant job work-load.

The New Employee

At last! You have the help needed. Yes, but even before starting day, there has been a high cost factor. How many man-hours were spent recruiting and selecting this new helper? Was your overhead built up? And overtime, any paid? But there is more “cost.” 

This new employee won’t earn his keep at the start. It might take days, weeks (or years – RB) before the new employee is as good as the one you let get away. Mistakes may be made which are costly — they, too, are part of the over-all cost of getting a new employee. 

If yours is a business concern with few employees, then this condition is more serious than to an employer with many helpers. 

Who Is To Blame?

It is easy to blame high turn-over of help on conditions beyond your control. But are they? You can’t keep all the employees with you. But are you trying hard enough to keep those you have now? 

Perhaps you are not careful enough in who you hire. Take more time to interview applicants and try to learn not only how they will do the actual work of the job, but also how they will fit in with the rest of your crew. Tell this new applicant the duties of the job applied for. And don’t just mention only “nice” things about the job — give a true picture. It is much better for an applicant to refuse to take the job than to quit after two weeks or so!

The first day is a tough one — for any new employee. Don’t make the mistake of turning him over to an experienced employee and then ignoring him. Instead, several times during the day stop and chat. Ask a couple of questions and be sure to mention that the new person is free to ask you questions about the job. Make this new employee feel at home. Make him want to stay with you by sustaining this approach.

Tell each new employee your rules, such as rest periods, time for lunch and general working conditions. Tell him of your fringe benefits. Explain who is in charge and of what — and who is second in command. Show where everything is that will be needed on the job. Your pay schedule is very important to new employees — each wants to earn more and is entitled to know your pay increase policy.

So He’ll Stay

When employees are treated decently, they are not likely to quit working for you. All you need to do is to act toward them in a decent manner. Treat them well, as they expect to be treated. In doing so, you will not only retain steady employees, you’ll be making more net profit. 

Contented workers have the owner’s best interest at heart. See to it you have employees who fit this description! RB

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