Want to save $50,000?
Recruiters tell me that the total cost to replace a person is between 50% and 150% of their annual salary (includes recruitment costs, lost productivity while recruiting and lost productivity while they get up to speed). Depending upon what you pay you team this could be $30,000 to $150,000 – that’s a lot of money to waste. And if you replace the same position every couple of years then the cost multiplies out of control.
Last week I presented to a group of leadership coaches and professionals on Leadership Lessons from building my Fire Protection Maintenance business from owner centric 5 person business to a 21 person business where I am free from daily operation – this week I want to share some of these lessons with you.
Lesson 1 – Develop don’t buy skills
As our businesses grow the easiest way to expand is to hire someone who knows what they doing … WRONG.
In my experience buying highly skilled staff has a number of disadvantages that include
Sometimes there is a minimum skill level you need, such as a person who is a licensed electrician, but beyond this you should be hiring for attitude and upskill and train a person for skills.
You should also look at promoting from within, providing a career path – even if it requires someone to leave to create a vacancy.
But it’s not just about promoting them and leaving them to it – you need to train and mentor them until they are up to speed with this new role. If you don’t have the skills yourselves then you will need to source external training and mentoring for them.
The result
If you hire for attitude not skill then you can hire a diverse team that can work together cohesively.
If you promote within and focus on skill development then you build a loyal workforce that will stay with you long term.
Recruiters tell me that the total cost to replace a person is between 50% and 150% of their annual salary (includes recruitment costs, lost productivity while recruiting and lost productivity while they get up to speed). Depending upon what you pay you team this could be $30,000 to $150,000 – that’s a lot of money to waste. And if you replace the same position every couple of years then the cost multiplies out of control.
Last week I presented to a group of leadership coaches and professionals on Leadership Lessons from building my Fire Protection Maintenance business from owner centric 5 person business to a 21 person business where I am free from daily operation – this week I want to share some of these lessons with you.
Lesson 1 – Develop don’t buy skills
As our businesses grow the easiest way to expand is to hire someone who knows what they doing … WRONG.
In my experience buying highly skilled staff has a number of disadvantages that include
- They are expensive
- They come with their own way of doing things – this can often contradict how you and your team already operate. If “how you do things” is what wins you new business they can significantly impact on your business’s reputation
- They eliminate a progression path for your team – if they see that there is no career progression with your business then they will eventually leave you.
Sometimes there is a minimum skill level you need, such as a person who is a licensed electrician, but beyond this you should be hiring for attitude and upskill and train a person for skills.
You should also look at promoting from within, providing a career path – even if it requires someone to leave to create a vacancy.
But it’s not just about promoting them and leaving them to it – you need to train and mentor them until they are up to speed with this new role. If you don’t have the skills yourselves then you will need to source external training and mentoring for them.
The result
If you hire for attitude not skill then you can hire a diverse team that can work together cohesively.
If you promote within and focus on skill development then you build a loyal workforce that will stay with you long term.
