Talent and What it Means to the Bottom Line

Periodically, Talent software is overlooked as an unnecessary company expense. However, if strategic leaders acknowledged the rise of costs associated with replacing employees, they may reconsider that mindset.             

Most of the non-tangible assets such as training, culture assimilation, teamwork and morale are accounted for in expenses associated with employee departure. However, the catastrophic expenses to the bottom line should really trigger a leader’s attention. According to “Hold on tight –retention is now the issue, An in-depth look at engagement and retention in changing economic times” by Fuel50,

Replacing an employee is generally estimated to cost between one-half and five times that employee’s annual salary, the cost to the organization of such churn is staggering. As the average salary within the US was estimated at $48,000 per annum in 2013, and overall attrition rates are estimated at 23.4%, a 100-person-firm could reasonably expect to spend between $600,000 and $6 million in one year if 25% of their workforce decide to leave. Not to mention the time, skills and organizational know-how that walk out the door with employees.

With this insight, perhaps more companies will recognize the need for a system to help identify potential issues before they arise. Fual50 also notes, “65% of all organizations now budget for engagement initiatives and another 18% are considering formal budgets for it”, which indicates they’re catching on to the severity of this oversight.  Imagine how much less revenue a company may need to make if they just saved on these avoidable expenses.

This futuristic planning doesn’t even take into account a company’s succession planning and the overall impact to an organization if a key leader leaves….