As we grow our businesses, there comes a time where we need to hire someone to pick up the slack. Oftentimes, these are the entry-level jobs. While entry-level jobs aren’t the highest paying jobs, turnover can make them expensive because you are spending time, money, and resources in hiring and training new employees.

What is employee turnover?

To calculate your turnover rate, you divide the number of people who left by the average number of employees during the same period. If you have 20 employees and 2 left during a period of time (month, quarter, year – you pick), then your turnover is 2/20 = 0.10 or 10%.

What are replacement costs?

To replace an employee, you might need to post the job, spend time interviewing and doing reference checks. Then, when they join the organization, you will have initial training costs and any new employee expenses like business cards. New employees aren’t always as productive as their predecessors, so there is a loss in productivity at the beginning, as well. Also, if you had to terminate the employment of the predecessor, you may have termination expenses to include. As you can see, it adds up.

What can you do about it?

Step 1: Be Clear on Your Needs

When you know who you are looking for, your staffing efforts become much easier. Prepare a job description. Know the skills, personality traits, hours of work, and work ethic you are looking for.

Step 2: Improve Your Recruiting

When you are clear on who you are looking for, it is easier to find them. Are they looking on kijiji or are they registered with a recruiting firm? Are they about to graduate from high school or do they have college/university education? What kind of headline is going to capture their attention? Write your ad so that it tells a story that resonates with the kind of person you want on your team.

Step 3: Improve Your Interview and Selection Process

This is where you make your pitch – as well as screen out the less exciting applicants. Your interview should be informative for both parties. It should be enjoyable, easy, and lead to a natural conclusion of whether the applicant is a good fit and desires to work for you.

Step 4: Improve Your Training

You are going to want to have the tools and training for your new team member ready, whether it is a gas pump, cash register, or computer. You will want to provide proper training with checklists to make sure that your team member is set up for success.

Step 5: Retention Considerations

If your employees don’t quit, you don’t have to hire new ones. It is as simple as that. Here are some thoughts to retain your team:

  • How will you make it fun?
  • How will you provide recognition and feedback?
  • Seek feedback and then implement the good ideas.
  • Reward longer service.
  • Provide fair and competitive compensation.
  • Promote from within.
  • Be a good leader.

Implementing some or all of these steps will help you find and keep your entry-level employees, resulting in lower costs in the long run. Incorporate these ideas into your People Plan and you will have a healthier bottom line.

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Published by Michelle Hamelin

Michelle Hamelin provides business consulting and coaching services, working primarily with owners of small businesses. I am a planner by nature, which means I work with you to gather facts, analyze the work, and then help you create a plan to get to your goals.

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