From Hidden Costs to High Profits: The Business Case for Valuing Your Employees

Let's talk about your talent—the people in your business who drive growth and make your vision a reality.?

How do you feel when one of them decides to up and leave? Perhaps after you’ve invested time and training into their development?

Do you start adding up how much it's going to cost the business? Let's break it down:

1. Initial Recruitment Fees: The cost of finding and hiring new talent can be significant. Studies show that replacing a salaried employee costs 6 to 9 months of their salary on average.

2. Onboarding: The hours spent in the early days holding their hand as they find their groove. Onboarding typically takes 8 to 12 weeks, during which productivity is reduced.

3. Training: The time spent training them in management, leadership, and culture match, as well as supporting their professional qualifications and CPD.?

Training new hires can cost 20% of an employee’s salary.

4. Loss of Expertise: The loss of a mature workforce member means they will no longer use their knowledge and experience to innovate for you or root for the business.?

This expertise loss can impact the team's overall productivity by up to 20%.

5. Project Disruption: Ongoing projects get disrupted, causing delays and potential losses.

6. New Hire Recruitment Fees: The next hire brings another round of recruitment fees.

On average recruitment fees are 20% of the new hire’s salary.

7. Fear of a Mis-Hire: The risk and cost associated with hiring someone who might not fit can be high, potentially costing the business up to twice the person's annual salary.

Let's add that up:- Assuming a salary of ￡50,000 (to keep it simple) = ￡123,000. That’s a lot of money straight off your bottom line.?

It is super clear, that attracting top talent, retaining, and engaging your people directly affects your profits and productivity on both a micro and macro level. An unhappy team member can impact the morale of all those around them, leading to a ripple effect of dissatisfaction that affects the overall culture, a surefire way to stifle growth and profits.

Everyone knows what it’s like to have a member of staff ‘gossiping’ in the background, whether their Chinese whispers are about the business or not, it doesn’t matter, it sets a cultural tone that isn’t helpful and breeds negativity.

How do you motivate your team and keep them with you?

Here are the simple well-known things you can do:-?

1. Rewards and Benefits: Ensure your employees feel valued with competitive rewards and benefits.

2. Great Employment Packages: Offer packages that meet their needs and expectations.?

3. Hybrid Working: Provide flexibility if your people want it.

Most importantly, but often not seen as a priority, build a strong employer brand and company culture. This will directly affect your profits and your productivity.? You will attract your people to you. Top talent will align with your brand when it is cohesive, clear, and strong.? They will stay with you when they feel they fit, when they know on a subconscious level that they are recognised and valued.?

So how do you do that??

The Secret Formula: Culture Fit and Development

Recruit people who fit your culture. Ensure they match in terms of their preferred working environment, communication style, and ability to work autonomously. Match their natural talents and skills with what you require both on a role-for-role basis and within their team.

Pay attention to their burnout signals. These stressors will drop people into their core traits and drain their energy and enthusiasm.?

Offer a development path. People work best when they can see where their career is going and how they as an individual add value. Helping them develop their strengths will enable them to enter a Flow State, leading to greater productivity and satisfaction.

Science-Backed Data for Insightful Hiring. Get underneath the surface of their CV . Arm yourself with science-backed data that analyses the subconscious drivers of your people, identifies their natural talents and skills, and provides information about their ideal working environment, communication, and learning style. Once you know what makes them tick, integrate them into your business to ensure they can shine.

Your business will grow when your people do. Your profits will grow when your people are happy, seen, and heard, doing what they're good at and what they love. Investing in your talent is not just a cost—it's a crucial strategy for sustainable growth and success.

If you want to find out more about our Gallagher Gray Ltd talent method, which offers science-backed, data-informed analysis of your people’s subconscious drives, identifies their talents and matches their skills to what you need, then send a DM and let’s talk.

Industry Statistics references:

Employee Turnover Costs: Replacing a salaried employee costs 6 to 9 months of their salary (SHRM).

Onboarding and Training: Onboarding typically takes 8 to 12 weeks, and training new hires can cost 20% of their salary (Glassdoor).

Productivity Impact: Loss of expertise can decrease team productivity by up to 20% (Gallup).

Mis-Hire Costs: Hiring someone who doesn't fit can cost up to twice their annual salary (Harvard Business Review).

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