"The biggest expense is Opportunity Cost" - Anonymous
Employee turnover calculators only tell part of the story. They tell you what you are spending on the instability of your current workforce. They don’t tell you the Opportunity Cost you are losing because you don’t have the stable workforce you need to pursue other opportunities.
In the past, I have written about how I first got thrown into the Management of the Greatest Asset. Our Employee Turnover was so bad in the Senior Technician ranks, the people who made us money, we were quickly bleeding out and were in real danger of failing to be able to perform as an organization.
I have written about how we were able to stop the bleeding and even got to a point of Zero Employee Turnover in the Senior Technician ranks my last couple of years in that organization.
So what happened to that company? When I was there they did about $150 million in revenue and about 2,500 employees. Last year they did $1.2 Billion and have many times more employees. Obviously, there have been an infinite number of decisions and successes that has gone into that type of growth. However, one of the foundational elements that helped start that growth was our ability to control our turnover and our proactive approach to the Management of our Greatest Asset.
What are the three areas of Opportunity you have which you are not pursuing due to the instability of your workforce? Put a number to it:
- What are the projected revenues?
- What are the projected profits?
- Is there an area which has a high profit margin?
I would be willing to bet the above is in the millions of dollars. After we stabilized our workforce we were able to penetrate a market which had a much higher profit margin then all the work were doing beforehand. Yes, it was in the tens of millions of dollars. Ironically, this work also allowed us to pay our technicians more money which further reduced and stabilized our employee turnover.
Employee Turnover feeds on itself – it just gets worse. The negativity is palpable. Proactive Management of the Greatest Asset also feeds on itself. The successes build on themselves – the employees see it and feel it. They no longer want to listen to the naysayers. The employees start looking for how they can get involved.
How much is that movement worth? Having a Greatest Asset who no longer immerses themselves in the negativity but in contrast – don’t want to hear it, won’t repeat it and instead wants to move toward the positive?
How does that happen? Spoiler alert!! It is not with birthday cakes, balloons or social media campaigns.