Five ways recruiting and retaining talent can be profitable
Those two words can make any small business owner or CEO cringe. And with good reason! Replacing an employee costs, on average, $4,000 and takes 24 days, according to one Glassdoor study.
That study only considered initial costs. Add in long-term costs like lost productivity and the number goes even higher. No wonder there are so many blog articles about how to retain talent. Honestly, you probably don’t need another one. However, few articles tell you how certain talent retention efforts can be profitable.
So, as complex and expensive as it may seem to implement some common retention initiatives, they can potentially turn into profit centers for your business. Here’s how.
Career Development Paths
A structured career development plan can make your business very profitable. Those plans provide employees a chance to grow and feel challenged. And when they meet those challenges, they feel more confident in their jobs. That can help build loyalty no matter what generation of workers you have.
But career development opportunities also make them better at their jobs. And that is often reflected in the customer experience. Happy customers help your business grow. That growth means you may get to hire more employees and create new levels of opportunity for your existing ones.
With a bit of imagination, you can see how this equation of challenge, confidence, customer experience, and growth can become a perpetual cycle of business opportunities.
Career development is essential, but it can take time, especially in small businesses. Employees may not want to wait that long.
That’s where personal development opportunities come into play. Some businesses offer a stipend for employees to take college courses or pursue classes in an area of interest outside of work. But how does that help you retain employees and grow your business?
First, it sets a tone for company culture. Everyone from boomers to Generation Z wants to know their employer cares about them. Personal development opportunities do that. And when employees feel valued, they are more productive.
It also serves as a great perk in recruiting the best talent possible. This can cut down on job advertising costs and reduce opportunities costs caused by you or your current employees covering the duties of a job until a new hire is found.
There are substantial costs associated with this one. Setting clear expectations requires a serious investment of time in creating an excellent training program, implementing it, and keeping it current.
An effective program will have overhead, including personnel, training materials, and employee time away from perceived profit centers. But the payoff can be huge. Fast-casual restaurants like Jersey Mike’s and Dickey’s Barbecue have extensive training programs for their staff.
They recognized early that solid training programs freed up owners to scale the business. Good training programs also enhance the customer experience, resulting in the best kind of marketing: word-of-mouth. And like career development opportunities, training programs lay the groundwork for employees to grow within a company.
Putting it all together
Often, business owners view employee retention programs as cost centers. But when appropriately leveraged, these programs can pay for themselves and, in some cases, even generate excess profit.
In today’s challenging hiring climate, it’s definitely worth the time and effort for you to look into these areas and weigh the opportunity costs for your business.