If you’re hiring new employees at any level, you’ve probably heard some of these statistics. They’re the kind of stats that make HR people break into a cold sweat. They’re the stats that tell you how much your company loses to employee turnover, based on the cost to hire, recruit and train a new employee to proficiency.
Employee Retention Statistics
According to the Center for American Progress, a foremost U.S. business think tank, the median cost to hire and train a new employee is 21 percent of the employee’s annual salary – but the actual percentage varies greatly depending on the complexity of the job.
The report goes into a few specifics:
- Replacing an employee who earns less than $30,000 costs about 16% of his/her salary
- Replacing an employee who earns less than $75,000 costs about 20% of his/her salary
- Replacing an executive level employee can cost as much as 213% of his/her salary
- 50% of new hourly workers leave within the first four months
- 50% of all outside senior executive hires leave within the first 18 months
Based on those last two statistics from the Society of Human Resource Management, the average manager can expect to lose one of every two new employees after investing significant time and money to attract, hire, and train them. What’s even worse is that in many cases, the companies can’t even tell you exactly how or where the hire went wrong because they have no process in place to track the training and onboarding process.
Effective Onboarding Processes Improve Retention Rates
The good news is that effective onboarding – the process of acclimating new hires to the company and getting them started as productive and happy employees – can greatly improve your company’s new hire retention rate. It’s an opportunity to reward your new employees right away too, which should increase retention. When they finish the necessary tasks to do, send them a note or a certificate to recognize their effort! We have a certificate of completion templates resource that gives you options of what you could send their way.
Onboarding goes beyond the usual paperwork and training metrics that all companies do as a matter of course. It’s a planned process to introduce new employees to the company and vice versa, ensuring that all the important stuff – including where everyone gets together for drinks after work – gets covered in those critical first months.
The fact is that with or without a defined process, new hires will learn the ropes. When you define the process, though, you get to teach the ropes to new employees in the most effective, most encompassing way. As Erin Perry, director of client solutions for a Wisconsin recruiting company told Inc. magazine in an article about building your own onboarding process, “Your employees are going to get orientated whether you plan for it or not. But if you do plan it, it’s a lot more likely to be successful.”
Check out how BambooHR uses Lessonly for employee onboarding here.
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