Wk 9 – What is? Staff Engagement vs. Cost of Staff Turnover

Hi everyone, I’m Peta Cussell from Project Ops and this is week 9 of our 10-week series discussing key areas of Human Resources relevant to Small Business. This week I am going to talk about the Importance of Staff Engagement and the Costs of Staff Turnover in the workplace.

Staff engagement is an area that sometimes can be overlooked in a small business as business owners and managers are so focused on making ends meet and subsequently wearing so many hats, there just isn’t the time. Nonetheless this important area should be made a top priority, as there is a clear link between staff engagement and business performance.

Engaged employees are highly motivated, more productive and are committed to their employer. They have job satisfaction and are willing to go the extra mile, usually making management of such employees an easier task resulting in more time for business owners to ‘work on the business’. Staff engagement also influences attendance and staff retention, again both impacting greatly on the business’ performance and bottom line.

Hire people whose passion intersects with the job.jpg

With disengaged employees on the other hand, you usually find higher rates of frequent and unplanned leave as they just don’t want to go to work. Minimal effort will be exerted as they only do what they have to do to keep their job. Productivity will drop and they will struggle to find energy and focus, resulting in their job not getting done. Work quality will usually drop with more frequent errors and missed deadlines, combined with complacent attitudes. And contribution to the rest of the team will diminish resulting in frustrations and often conflict with them ‘not pulling their weight’.

So its fair to say that disengaged staff that are not re-engaged, are more than likely going to end up looking for employment elsewhere, resulting in staff turnover or ‘employee churn’ to some. But what you may not know, is that staff turnover costs the business much more than you may think. Lets take a look….


Staff Turnover - Costs Involved:

  1. Termination payout amounts (e.g. pro-rata long service leave and payment in lieu of notice).
  2. Payroll officers’ time spent processing termination pay.
  3. Exit interviewer’s time and cost.
  4. Time required for employee and manager to complete paperwork, return and check employer’s property.
  5. Miscellaneous administrative tasks (e.g. closing off computer access and deactivating alarm codes etc).
  6. Loss of productivity from other employees filling in for the vacant position.
  7. Job advertisement costs.
  8. Salaries/wages of employees involved and time spent on the recruitment process including screening applications, attending interviews, debriefing afterwards, verifying CV contents, checking references, and communicating rejections.
  9. Recruitment agency or HR Consultant costs.
  10. Fees for conducting Background Checks, Psychometric tests, Pre-employment medicals exams etc.
  11. Salaries / Wages of employees involved in and time spent on the training and induction processes, (e.g. trainers, managers, 'buddies’ etc).
  12. Training / Induction resources and facilities.
  13. Loss of productivity in early stages of employment.
  14. Loss of productivity in final stages of employment.

So what may seem like an inconvenience now... focusing on your staff engagement will end up potentially saving you some big dollars!


So what causes Employee Disengagement?

While every business faces unique challenges engaging their staff, common to most are:

  • Lack of trust and respect
  • Poor management and leadership
  • Inadequate feedback and manager-employee interaction
  • Poor alignment of individual goals
  • Lack of recognition

So what are you going to do to keep your staff engaged?


How Project Ops can help?

The team at Project Ops have many years of experience building, leading and managing teams and really understand small business. We can assist with HR Advice and Guidance; we can set up your Performance Management system and guide you through the process; we can assist with team planning and role definition; we can assist with leadership coaching; we can provide compliant HR Policies and HR documentation (such as Employment Contracts; HR Letters e.g. warning letters, termination letters etc; Forms; and Checklists); we can recommend and set-up HR Information Systems; and we can also help you with the Recruitment of staff in the first place! If you would like to discuss how Project Ops can assist your business, please get in touch!

Project Ops are one of Australia’s leading outsourcing specialists, providing some of Australia’s best talent to businesses of all sizes for one-off projects, short or long-term contracts. Specialising in Human Resources (HR), Recruitment, Business Operations, Change Management, Project Management and Event Management.