In a world obsessed with newer, better, faster, and younger, the value of age seems to go out the window. In reality, many older, established things are far better than new. Take historic buildings, antique quality furniture, established neighborhoods, classic cars, and the knowledge of an older generation for example. With companies working to become more progressive, have we failed to recognize the value in existing employees?
While it can be tempting for many companies to place emphasis on the most progressive and youthful employees, they could be missing out on the wisdom of the existing generation . Employees who have spent many years with a company have an understanding of business and functionality it will take years for the new group to learn. Valuing and retaining the existing employees can be hugely beneficial for your company in terms of dollars and cents.
A common statistic used when talking in terms of employee replacement costs, is that replacing one mid-level employee could cost your company 150% of that employee’s salary. If your lost employee was older and highly specialized, that figure could rise to as much as 400%! Understandably, it makes sense to retain an employee, rather than pay 400% of their existing salary to find a replacement at the same level. Included here are a few of the ways hiring new could cost you and why you should work to retain existing employees.
Locating a Replacement
For any kind of job above entry-level, your company is going to be shelling out to find the professional you need. Often that means paying a headhunting firm a flat fee to begin screening and locating potential employees. If you don’t utilize a firm to search, you will be fronting the costs in extended hours for existing employees as they seek out a replacement and screen potential employees.
Interviews and Training
Once you have actually located a few potentials, which takes more than a few weeks, you will need to begin an interview process. Your company will likely have a multi-level employee screening process that could involve multiple interviews at different times. This will cost your company in manpower and could cause you to get behind on valuable projects.
After you have finally located your perfect replacement employee, you must begin training. While length of training can vary for every job, it is always paid. As the new employee gets settled into their role, they are likely not working with the speed or efficiency of the previous hire and will cost the company more for less work.
While society might be obsessed with newer, your company should have the wisdom to recognize the value of established employees. Before your existing employees retire out, be sure to preserve their wisdom and specific work talents for the next generation.