The process of hiring a new employee is time-consuming and expensive, and when that individual does not remain with the company for an extended period of time, it may have major repercussions for the company.
The following is a list of the top five ways in which a company loses money when it hires a new employee but they do not remain with the firm for at least a year.
1. Lost revenue
It is possible for a new employee's departure from a firm after just a short amount of time to have a major effect on the income of the organisation. The money spent on recruiting and training the person has been squandered, and the business will need to begin the process of employing new employees from scratch, which will further delay the company's ability to revenue growth.
2. A decline in the team's morale
The morale of the surviving personnel might be badly affected when there is a high employee turnover rate. They might be underappreciated, overworked, and unmotivated, all of which would contribute to diminished production and higher employee turnover.
3. Decreased satisfaction reported by customers
A new employee who does not get enough training or who does not remain with the firm for an extended period of time might have a negative influence on the satisfaction of the company's customers. Customers might become dissatisfied as a result of the errors made by new workers, which would result in a loss of revenue and a tarnished image.
4. Rising expenses associated with employee acquisition
The process of hiring a new employee is an expensive one because of the expenditures associated with advertising, recruitment, interviewing, and training. These costs are lost by the firm when an employee quits after a short amount of time, and the company is forced to restart the procedure, which leads to additional expenditures.
5. A decrease in overall productivity
Productivity may be significantly impacted when a new employee does not remain with the organisation for at least a year after they start working there. It was a waste of both time and money to train the person, and now the remaining workers must make up for lost ground, which will result in decreased productivity and an increase in the amount of work to be done
The bottom line
It is possible that the business the firm loses as a result of the departure of a new worker who does not remain with the organisation for at least a year will be considerable overall. To lessen the severity of these unfavourable effects and cut down on staff turnover, it is imperative that firms make investments in employee retention measures.