According to Statistics Canada, more people are now working than before the recession of 2008 and the number of job vacancies is increasing.\u00a0 These statistics reflect what some small business owners have been telling me in recent months.\u00a0 They are having problems recruiting and hiring qualified staff.\u00a0 They are spending an increasing amount of time and money trying to fill vacancies and often settle for candidates who may not last three months.<\/p>\n
Having to constantly hire new staff is not only disrupting for the business, it can be a drain on its resources.\u00a0 \u00a0Business owners usually know the actual costs of advertising, new uniforms, and training.\u00a0 However, they rarely factor in their own time for screening resumes, conducting interviews nor the added administrative costs associated with setting up a new employee\u2019s payroll and benefits.\u00a0 \u00a0Did you know that the total cost of new employee has been estimated at 50% of the annual wage of the new employee?<\/p>\n
For any job, there is usually a period of adaptation for the new employee.\u00a0\u00a0 Typically, it will take between three and six months for the employee to become fully proficient in their job i.e. 100% productivity.\u00a0 New employees take more time, make more mistakes, and ask for more help therefore disrupting the work flow. \u00a0This is a loss of productivity.\u00a0 Until they are fully proficient at their new job, a percentage of their salary represents lost productivity.\u00a0 For example, an employee who earns $1200.00 per week and achieves 50% of productivity is incurring $600.00 per week of loss productivity costs.<\/p>\n
While the lost in productivity can be estimated, there is another potential cost that is much harder to estimate: lost clients or lost opportunities.\u00a0\u00a0 A new employee is more likely to make a mistake with clients.\u00a0 While an existing and loyal client might overlook the issue and give you another chance, a new client will probably go elsewhere for business.\u00a0 We have all done it.\u00a0 We don\u2019t like the first impression and move our business elsewhere.<\/p>\n
What can employers do?\u00a0 Retention is an obvious element of the solution.\u00a0 Employers who retain employees will avoid recruiting and hiring costs.\u00a0 The other component of the solution is to do a better job at recruiting, motivating, and engaging new employees. \u00a0With that in mind and to help business owners, we have scheduled FREE webinars<\/a> on effective recruiting and hiring.<\/p>\n