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| Title | Turnover Steals More Profits than Fraud and Robbery Combined |
| Article Text |
Robbing Company Profits without Guns
Fraud and bad hires lose companies big chunks of money that are unseen, but when exposed, the naked figures are a devastating surprise. Fraud gets all the headlines, while bad hires and turnover are more prevalent and damaging to companies’ and managers’ careers, but far too often, go unnoticed. Are Your Bad Hires and Turnover Stealing Profits? Chances are your company has not calculated the costs of a bad hire or turnover and the impact on the bottom line. CEO’s, CFO’s, and managers who have bottom-line accountability and know the approximate dollar amount of turnover are likely to manage these costs and improve profits. Exposing the naked figures caused by bad hires and turnover will boost profits and make you a hero. Left unexposed, they are profit robbers. Every Manager Must be Able to State the Expense of Turnover! The first step is to define the turnover rate as a percentage-for example 20%. Let’s assume this 20% gives you an annual turnover rate of twenty people in the sales department. The estimated cost of landing and training a replacement, figuring visible and hidden costs, is $200,000. The cost of $200,000 X 20 sales reps is $4 million in lost profits. If your organization’s profit margin is 10% that means an additional $40 million in sales must be generated to offset this 20% turnover rate! The Guarantee of Morale, Profits, and Careers Executives and companies are guaranteed profit problems if turnover expenses are left undefined and unmanaged. The first key to managing turnover costs is to make the best hires as bad hires guarantee high turnover costs. The second key is to get rid of deadwood and replace them with good hires. There is nothing more critical than these two moves to stimulate morale, profits, careers, and this will reduce turnover. See more of the article at http://www.hiringfiringexperts.com/hiring-firing-articles-turnover.htm |
| Author | Don Paullin |
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