The two most costly human capital expenses an organization will have is the onboarding and offboarding of staff. Just take a moment to think about that and if your scratching your head or think I’m crazy let’s take a moment to explore both of these costs.
Loss of staff costs: (Loss of intrinsic knowledge) + (Loss of productivity) + (Irreplaceable skills) + (Loss of leadership)
Talent acquisition: (Staff time to interview) + (Search firm fees) + (Employee referral fees) + (Onboarding time)
Backfill Database administrator in NYC.
In this example we will say we Phone screened 20 candidates, brought 5 in for in person and 2 for final meet with CTO.
Blended rate for staff = $150/hr
Staff time to interview = (20 phone screens * 1 hour * $150) + (5 onsite * 2 hours * 150) + (2 final * 2 hours *150) = $5100
Search firm fees = 180,000 * .25 = $45,000
Onboarding time = 30 days to be production = (180,0000 * (30/365)) = $14,794
Talend acquisition cost = $5100 + $45,000 + $14794 = $64894
This isn’t even factoring in the whole calculation of loss of staff and projects that couldn’t be completed. As you can see the cost goes up very fast.
Why do I bring this up? Well that brings up the next point which is, investment in your current staff.
Investment in current staff
We so easily get lost in budgets and bottoms lines and asking the in the moment question of “Do we really have to spend that now?” I’d ask the question back of “Do you really want to avoid a $100 lunch bill for the team and instead pay to replace them?” If your working for an organization that can’t see the value of investing in staff, then you should be fighting to change that mentality on a daily basis. This is the difference of being a leader versus being a follower. There should never be a moment that you aren’t fighting for your team, as this shows not only sets an example for the rest of leadership is also shows your team that you have their back and believe in them.
Now investment of staff can come in many ways and here are just a few ideas:
- Team building events
- Monthly lunches
- Quarterly happy hour
- Flexible work schedules
Out of this list I just want to take a little bit to focus in on a couple of the areas above. The first is around team building which overs the first three items in the list. Team building is an investment in not only the team but the individuals. Studies have shows that when you have employees that have a “Friend” at work they are more likely to stay and have higher productivity. See Gallup Productivity Poll or CNBC Why work friendships are critical. These are relationships you should foster, support and not get in the way of. They will develop naturally with your overall support of the team no need to create crazy get to know you events to force them.
Next, let’s talk training. This is a simple one. Budget for training and encourage your team members to attend training, conferences or your local user groups. If there is a user group that meets during the day encourage them to take the time to attend. This will have a significant long term benefits for example, in the technical space it will result in better innovation and less technical debt. I’ll save technical debt for another post, as that is a topic all in it’s own. I can’t stress enough to reinvest in your employees and provide the training for them so they can always feel as they are growing and not becoming stagnant.
Lastly, flexible work schedule, this is a hot button topic I know at a number of different organizations and wraps up to a much broader topic of Work /Life Balance. The first piece of advice I will give here is if that you don’t already have a policy in place to handle things such as remote work, sick time and vacation rules create one now. Having clearly defined rules around what is expected when someone is working remotely makes sure both employer and employee are on the same page. For example, here are a few areas I make sure are covered in a remote policy:
- Working hours
- Response times
- Work Phone forwarding
- Messaging (Skype, Teams etc…)
Remote work is only one a part work life balance as you also want to consider flexible work hours and vacation policy. Flexible work hours is rather straight forward, learn what your employees needs are and how you can combine them with business needs to make sure that you have both business coverage and work/life balance. Let’s say you have Employee A who has to drop kids off at school before coming to work and allowing them to come in at 9:30 rather than 9:00 could mean they wouldn’t have to find childcare and incur extra cost. This results in reduced costs for the employee and usually a higher satisfaction level with their employer. Vacation policy is one that is not always so obvious but not only encouraging employees to use there Paid Time Off but to also fully unplug is key to overall satisfaction. There should never be pressure to check emails or take phone calls during PTO and in some cases I have actually taken this as far as to create a policy that states if you check or reply to an email while on vacation your account will be locked out.
In conclusion don’t be the horrible boss, value your employees and realize that without them and their dedication you can’t effectively lead.