Even when the economy is down, top salespeople are in demand. Sales people have the ability to transition their skills from one sales job to another easily. This also means that companies are at a high risk of losing salespeople to more lucrative job opportunities.
Remarkably, the cost of hiring a new employee is approximately 200-percent of their annual salary. This includes paying off a former employee’s vacation accrual and severance pay, as well as wrapping in costs associated with job advertising, recruiting fees and staff time to spend on reviewing resumes, interviews, paperwork, recruiting, new hire orientation and training. This cost does not even account for poor employee morale during job-transition periods.
Let’s assume the average salary for your company is $75,000. If the turnover cost is approximately 200-percent, this would mean that the company pays $150,000 for every employee that leaves. If your company has 100 employees and the average employee turnover is 10-percent per year, the total annual cost of turnover is $1,500,000. That’s a staggering amount.
Now that we have your attention, there are four questions your company needs to consider:
- What is your average year-over-year turnover rate?
- Is your turnover rate similar to the competition?
- Can you correlate specific changes to the turnover rate to anything that occurred in the workplace?
- Are there specific times of the year when you experience higher turnover?
When human resources personnel conduct exit interviews, it is important for them to gain as much insight as they can into why employees leave. Instead of asking open-ended questions, consider having employees rate factors on a scale of 1 to 10. Ask the right questions so you can determine if your environment allows salespeople to thrive.
During the hiring process, managers have insight into employees’ preferences, weaknesses and strengths. However, most fail to act on this information, which is a valuable resource tool. Managers could use this information to develop and retain employees, making the job a good fit for each person’s skills.
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