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Alexsandro Souza
Alexsandro Souza

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Costs of losing an employee

I am always posting provoking post on my Linkedin, and I have decided to replicate those here. Let's socialize!

Are you aware that as an employee, you are an "appreciating asset."? Do you know that you are a high "cost" to the organization before becoming valuable?

The longer you stay with an organization, the more productive you get - you learn the systems, learn the products, and learn how to work together.

Many studies show that the total cost of losing an employee can range from tens of thousands to 1.5-2X annual salary.

Some costs of losing an employee:

  • The cost of hiring a new employee includes advertising, interviewing, screening, and hiring. Some companies use external recruiters who charge a fee, typically 15–25% of one year's salary.

  • The cost of onboarding a new person, including training and management time - Ramping up new employees takes months and may also require significant time from your existing team for mentorship and training.

  • Customer dissatisfaction—for example, new employees take longer and are often less adept at solving problems.

  • Employee vacancy - It takes roughly eight weeks to go through the recruitment process - Waiting means losing money.

  • Cultural impact (whenever someone leaves, others take time to ask "why?")

I could add more cost to this list, but you already got how costly it can be for a company to replace a human asset, right?

Now imagine all that cost to end up getting a bad employee.

Without performing the proper tests during the hiring process, you could be saddled with a bad dev at the same price as a great employee.

I have already blogged how interview tests are designed to exclude good engineers. You may want to check it out!

In summary, losing an employee is expensive; employee retention has become a critical issue; investing in the hiring process is a must-have

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