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Experience Counts: The Business Case for Hiring Mature Workers (A
Three-Part Series)
By: Janet
Marinaccio & Lisa Jordan, Human Solutions LLC
Part Two: Stop Throwing Your Money Away - Understanding the Cost of
Employee Turnover
The cost of turnover can place an extraordinary burden on any business. There
are several factors considered when calculating these costs, from separation
costs to lost productivity/sales, recruitment and training costs to the impact
the vacancy has on the current employees who may have to take up the slack.
After all, just because there is a vacancy, the work doesn’t stop.
There are a variety of ways that companies calculate turnover. The Small
Business Advisor website (http://www.isquare.com)
estimates the cost of turnover is equivalent to 150 percent of a worker’s annual
salary and up to 250 percent for managerial jobs. For a company with 500
employees with an average annual salary of $45,000, and a turnover rate of 10
percent, the average annual cost for turnover would be in excess of $3 million.
Sasha Corporation, an HR consulting firm in Cincinnati, OH published on their
website (http://www.sashacorp.com/) a
comparison that estimated cost of turnover for an $8.00 per hour employee. For
this position, they estimate an average cost of turnover at approximately $5,500
(with the lowest estimate at about $3,500 up to as much as $25,000 per cycle).
In studies of generation differences between Baby Boomers (1943–1963),
Generation X (1964–1981), and Generation Y (1982-2001), it is clear that there
are differences related to job retention. In a report published by KPMG, Beyond
the Baby Boomers, 25 percent of the study’s respondents reported a more than 30
percent turnover rate among Generation Y employees (moving the estimate
calculated above up to $9 million per year). Generation X-ers have sought a
balance between work and home life, while Baby Boomers continue to be known as
the generation with a strong work ethic who have been defined by their work.
Bottom line, Baby Boomers are much more likely to stay on the job.
Certainly given technological developments over the last 20 years, employment
candidates from both Generations X and Y will likely enter the workplace with
greater computer and technical skills, while mature workers surveyed in the
Mature Workers’ Concerns During Job Transition study tend to see themselves as
having less proficiency in this area. However, HR professionals should weigh the
cost of turnover and the value of retention when making hiring decisions and be
sure not to overlook the experience and strong work ethic that a mature worker
brings to the work place. The cost savings could be significant.
Next in Part Three: You Can Change What They Know - Investing in
Experience
If you are an employer, to access a pool of motivated mature workers, contact
your local WorkSource Center. Visit
http://www.worksourcecalifornia.com/ and click the Business Resources link
on the left. Mature workers seeking employment may also visit the same site and
click on Services for Job Seekers.
Human Solutions LLC specializes in disability and workforce development
solutions for employers.
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