Employee attrition is one of the most severe issues confronting businesses today. The ‘Great Resignation’ is here and shows no signs of abating. Employees may resign for a variety of reasons, including a desire to pursue other opportunities or a sense of undervaluation.
The cost of training a new employee is often on the high side. However, because it can be costly, businesses should do everything possible to attract and retain talent whose interests align with overarching business objectives. If this is not done, productivity, morale, and the company’s bottom line will suffer.
Nowadays, workers don’t stay at one job for very long since they prefer to go to companies where they feel appreciated if they are unhappy or underpaid in their present position. When an employee quits your company, it may be a difficult and hard moment since a sudden employee departure can generate panic in even the best organizations and calls for prompt action to manage the exit properly.
Every employee is an investment in your organisation and losing one can be difficult. Furthermore, the process of recruiting and hiring a replacement can divert your attention away from the day-to-day operations of your organisation, resulting in lost productivity and revenue. Let’s look at some of the hidden costs of replacing an employee;
1. Advertisement and recruitment cost: When an employee leaves and their position needs to be filled, the organisation must send out job posting ads to advertise that there is a vacant position within the organisation, which has costs associated with it. There will also be costs associated with both sourcing and recruiting new talent.
2. Onboarding cost: Depending on the role, onboarding a new employee can take a single day or several days. During that time, your new employee will not be adding value to your organisation, and the person in charge of onboarding will be losing time that could be spent on other tasks. Some of the costs associated with replacing an employee include access to onboarding documentation, new employee equipment, paperwork, benefits packages, and access to company resources.
3. Loss of knowledge and morale: With every employee that exits an organisation, a certain amount of essential knowledge and expertise is also lost. Also, high turnover begets low morale. Employees who remain in the orgaisation may begin to feel uneasy as more pressure is often placed on them.
4. Employee Training cost: When you hire a new employee, you must devote time to training and coaching them on the job. Training costs will always be incurred even if you hire highly skilled and experienced employees. At the very least, they must be trained in the procedures and taught your organisation’s culture. These training costs will continue to mount until the employee is trained to the same level of productivity as the previous employee.
How to manage the cost of training new hires
1. Develop written guidelines instead of relying heavily on in-person meetings: Creating learning content that instructs the team on their individual task and role clarity takes time, but it is far more efficient than inviting employees over for a conference call. On the one hand, you can repurpose guidelines because an employee will have a document to use as a reference point at any time, reducing the need for them to contact team leads and managers frequently.
2. Develop repeatable and scalable processes: Employee onboarding and training are essential, but they must be approached correctly. The key is to design an onboarding experience that is both repeatable and scalable. Organisations should create a pre-designed onboarding process, and everyone who joins that department should have the same experience. However, some highly specialised roles may necessitate their own operations, but for the most part, consistent experience will suffice. A standardised onboarding procedure will save your company time and money. You can ensure that all employees receive the same level of training this way. You will increase productivity and employee engagement by providing a standard onboarding process. A smooth onboarding process can also help to boost employee retention. Another approach is to adopt the digitization of non-function specific company information
3. Make employee onboarding easier to access: Giving new hires easier access to company guidelines, training courses, and other socialisation materials will speed up the orientation process during the first few days. Although mobile employee training apps aren’t widely used yet, they’re sure to become more prevalent in the future: according to statistics, 75% of employees will own a smartphone that they only use for business. Talent managers should take advantage of increased technological adoption by developing a training application, which will allow a new hire to study while commuting, waiting in lines, and so on.
4. Divide Learning Throughout the Organisation: You won’t have experts waiting for you to assign another task, but if you find the right experienced staff to train other employees and reward them for it, your costs will be significantly reduced. The task here is to identify the team members with the most knowledge and experience and ask them to train the others. This will almost certainly not eliminate the need for formal training, but it will certainly reduce the need for it. Simply put, this means delegating parts of the learning process to people within your organisation. A knowledgeable and savvy employee can create course content for newer team members and even assist in assessing and evaluating their progress. You can adopt a three (3) tier learning distribution, where the top tier supervises the outcome of the middle tier, which consists of the actual “teaching staff.” Educators supervise and educate the third tier of employees, who are primarily understudies.
5. Adopt other training opportunities: Your organisation wants new employees to be significant contributors, and on-the-job training can vary in nature. While your organisation may have previously used an extensive training program, options such as coaching and mentoring could be beneficial to new employees. Experienced employees can provide guidance to new recruits, and hands-on training may yield immediate benefits for your business. New talent who hit the ground running can help in a variety of ways. These experts will learn precisely what it takes to complete routine tasks and will become more acquainted with their coworkers and work environments. This process can also save money on training by eliminating specific programs from their budgets.
Employee training and development are critical to corporate growth and revenue growth but can be costly. Reducing the number of tutorials offered to employees, encouraging mentoring relationships, and implementing online learning to some ways to reduce the cost of learning and development. But, before you get too excited about cutting costs, keep in mind that the quality and outcomes of learning come first. Your organisation will not stay ahead of the competition by cutting costs; instead, it will do so by being better, having better employees, and having a good work process. So, while lowering learning costs is essential, don’t go too far.
However, even if you have the best instructional design and training team in the world, you will need to outsource your learning and development process from time to time. This can help you save money on internal resources and overall training costs.
At Workforce Group, we know how to manage the cost of training new employees by utilising a variety of Learning tools, processes, and tricks.