Investing In Human Capital
Businesses are finally recognizing the hidden cost of Human Capital as a tangible and measurable expense. The progression of competitive workplaces, aggressive employment recruiting strategies, and increased mobility in the work force, has finally driven home the fact to business owners that retaining talent requires a multi-faceted approach.
It has also underscored the true cost of employee turnover, estimated at 3 times annual salary for a key employee. This includes lost productivity, cost of re-hire and re-training.
The dynamics of the employer employee relationship are complex. On one hand, the goal of the employer is to retain the services of the employee, to minimize turnover, increase productivity, and ultimately profitability and growth for the company.
On the other hand, employee needs are more complex than merely quantifiable compensation. Health benefits, 401K, vacation, sick time, all play a role in retention. However, job satisfaction, upward mobility opportunities, employee performance evaluations, open and transparent lines of communication, detailed job descriptions, company policies and procedures clearly stated in employee handbooks, are intrinsic non-quantifiable markers of employee satisfaction.
Many companies are now seeking employee feedback with periodic surveys. This allows employers to keep a finger on the pulse of employee morale and job satisfaction. Employees feel they are being heard and their opinions valued.
Companies are now taking retention strategies to the core of their hiring and recruiting practices. Consideration is also given to prior longevity, social and volunteer activities, in addition to merely assessing if the employee is capable of performing the task at hand.
Partnering with a PEO pays enormous dividends to a company. PEOs have Certified Human Resource Professionals (CHRP) on staff. These professionals guide clients in key areas of employee retention, HR management, job descriptions, handbooks, dispute resolution, and most importantly, are able to implement proven steps to increase employee satisfaction and create a positive work environment.