With all the costs that can be attributed to business one of the largest potential costs is often forgotten. The cost is conveniently hidden as a secret cost in so many business activities and yet it has the potential of really costing you a lot of money.
The cost I am talking about is the cost of replacing people. Employee’s are really the backbone of a business and it costs an enormous amount of money to train and keep and employee. The item that is often missed is how much money it costs to replace an employee.
Employee’s are quite varied. Some desire simple things like money, or a flexible work day. Others are more complex and desire things like challenge in work, or varied tasks. Each employee is completely different and yet we often treat each employee exactly the same.
I’m not talking about treating employee’s the same as in providing respect or a safe work environment, I mean in how employee’s are compensated. Rather than truly looking at what an employee wants for compensation we just postage stamp each employee. You do such and such so thus you get paid this much. Employee’s have hugely varying value and thus should not only be paid differing amounts but should be looked at individually.
This is where small businesses really have the edge on large businesses. Since you are much closer to your employee’s you have a better chance of understanding what an employee really desires. Keeping an employee happy at work goes a long way to not only getting improved productivity out of the employee but also keeps you from having to train a replacement all the time. Training an employee typically costs you 2 or more employee’s wages as well as drastically reduced productivity.
Please note I am not advocating paying some employee’s drastically more money than others, that can be a great way to chasing the lower paid employee’s away. I am talking about looking at the total package of compensation and especially at the parts that don’t have a huge impact on the budget. Things like giving people the occasional flex day off, or enabling people to seek more challenge at work. Happy employee’s are productive employee’s and when you can keep them happy without paying more money you have finally succeeded.
I understand that right now a fair number of small and large businesses are busy chopping people from the payrolls. Just remember not to alienate those you are keeping, if they are no longer happy to be working for you, you will end up loosing more than you bargained for.