Employment Testing Blog

Training Costs: Top Employee Turnover Costs Part 4 (yes, the final one)

  

  

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As you can see in this blog, we've already dealt with separation costs, vacancy costs, and recruitment costs.  The final piece of the puzzle is "Training Costs" for the new hire.  Or perhaps you call it "Onboarding", you suave HR guru.

Here are the components of Training Costs:

• Payroll specialist costs:  Adding the new hire into your payroll and benefits systems.

• Orientation costs: You have an orientation, don't you?

• Formalized skills training costs: How your new hire learns the programs, systems, and machines that are part of their job description.

• Informal skills training:  This can include mentoring but make sure to include the lost productivity and efficiency of the mentor during this period.

Now that we've listed the components of training costs, which one of the four employee turnover costs will be most costly for you?

It could be separation costs if you have a particularly litigious former employee. It could be vacancy costs if your temp (or stressed out employee) causes you to lose a major customer or miss a sales opportunity. And of course it could be recruitment costs, if you have trouble finding the right new candidate. Pre-employment testing for general work skills and also for semi-technical skills, such as computer skills tests (ie Microsoft Office tests, Excel tests, etc), can help you sort that out.    Training costs as the largest?  Ideally, yes, but training can get pushed to the back of the budget line.

And voila!  You have now replaced your recently departed employee.  Pretty easy, huh?  Well, not exactly.  It's a time consuming, arduous process that can drain productivity.  But eliminating unproductive staff is necessary, not only to help meet your own business goals but also to help increase the efficiency of other employees.