This document discusses how reducing employee turnover through investing in growth can improve business performance and profitability. It notes that employee turnover is a major financial drain and lists some of the direct and hidden costs associated with it. Data is presented showing that a company with 20% employee turnover and average salary of £40,000 would spend £8 million annually on turnover costs. Strategies are proposed for reducing turnover such as hiring the right people, understanding employee motivation, engagement, transparency and competitiveness.

1. Investing For Growth
Sydney Hunsdale, Consultant
Former Global COO Razorfish and CFO Vivaki, EMEA

4. Bottom line improvement
Reduces employee turnover
Increases performance
and productivity

5. More competitive
Operate more efficiently
Achieve greater growth
Deliver more profit
ROI can range anywhere from 20 to 7000 %

9. Greatest
Potential
Asset
Greatest
Potential
Liability

10. Largest single financial drain

11. Cost of Turnover
£4 billion annually
£184M in Media & Advertising
£1.9 billion in IT and Tech
20 weeks to 7 months to reach peak
productivity

12. TURNOVER
Recruiting
Interviewing
Administration
Training costs
Leaving costs
Lost productivity
Temporary coverage
Higher comp package
Overworked remaining staff
Lost knowledge
Strained client relationships
Realisation that your asset has become an asset of your competitor

13. True Cost Impact
Entry level – 30-50%
Mid-level – 150%
Exec & specialty 200-400%
Example:
Average cost of turnover at 100%
Average salary of £40,000
1000 employees; 20% turnover
£8 million annually

14. Costs are largely hidden
Doesn’t hit profit and loss statements
Not in the budget
Not accounted for on a line in the p and l
If that were true, management would certainly take more notice

16. 16
RECRUITMENT REALITY
1,400
Acquisitions/Other +67 Leavers (36%)
1,200
443
328 Dec 11 Headcount: 1,084
1,000 Net 2011 Hires 175
Dec 10 Headcount: 909 Recruits +49% (Net 2011 Hires excl Acquisitions: 108)
800
2011 Headcount Flow
HEADCOUNT
To achieve an 11% net headcount growth, it required hiring 49% new staff

17. Tech Talent
Higher turnover
Demand far exceeds supply
Cost and competition rising
High vacancy rates
Higher cost per hire
Contributes to higher cost of
turnover

20. …on voluntary
turnover
But don’t ignore
involuntary

21. Make it a Company-Wide Effort

22. Hire the Right People

23. Increase
Your
Leverage

24. Understand
What
Motivates
Them

26. Be
Transparent

27. Beat the Competiton

28. Engage Your Employees