Employment costs typically make up one of the biggest expenditures a business can face, meaning that cuts there feel inevitable for most owners when times get tough.
However, the younger generations are already predisposed to job hopping and changes to the way they are compensated can be the push they need to make the leap.
When deciding where to save money, it is worth noting whether retaining staff of facing a fresh wave of recruitment will be more costly in the long run.
Recruitment is one of those things that a business endures that contains more costs than might initially be apparent.
It might seem relatively affordable to engage with a recruiter or post a listing on a job search website, but the real expense is difficult to measure.
Research on the subject is vague and varied and primarily represented in dollars, but all describe the ways in which recruitment can swiftly drain resources.
At the low end, it is believed that recruitment could cost a business an additional $4,700 (£3,500), but there is some indication that the real figure is likely between 1.5 and twice as much as the annual salary and could amount to 213 per cent of the salary for an executive-level position.
Rather than being a weakness of the data, the disparity of figures reveals that the true cost of recruitment can never truly be known by a business, as it has to encompass a range of factors that cannot be measured.
Onboarding new staff means engaging in training, taking time to get them up to speed with the way that the workplace operates, restructuring client relationships, adapting to their specific work style and needs and ensuring that they fit well with the overall business.
All of this is for nought if the person does not make it through probation and the entire process starts again.
There are many challenges that face businesses when working to retain staff, not least the change in the way that different generations view their position.
Gen Z are more likely to switch jobs more frequently, with them having an average tenure of just 1.1 years in roles for the first five years of their career.
The fact that this job switching has enabled Gen Z and Millennials to earn 31 per cent more than their peers who remain devoted to a single company indicates that the trend that is known as lily padding will only change if employers give workers a reason to stay.
It is clear that when a worker is a good fit for the business and capable of completing the work to a good level, every effort should be made to retain them.
Businesses may need additional support to manage the budgeting requirements that come from retaining staff, but this investment is likely to be less costly than the steep recruitment bills that they would otherwise face.
Our expert accounting team can review your financial position to ensure that you are well-equipped to support your employees and can manage the costs of recruitment should it be necessary to seek replacements.
While some employee churn is inevitable, finding other ways of making jobs rewarding, either through additional benefits, training and upskilling, flexible working conditions and continual engagement with staff, can boost morale.
Each business is unique, so having a conversation with us is the best starting place to figure out what is possible for you to offer given your circumstances.
For expert support in investing in retention and managing recruitment expenses, get in touch with our team.
Jim Botton – Pleasure Beach (Skegness)
