Did you know that it costs an average of more than £30,000 to replace a single employee/staff member? Each year, replacing employees costs UK businesses more than £4.1bn, and this figure is only going up.
In this post, we break down these replacement costs in detail, and look at some practical ways businesses can use to slash this figure through effective employee scheduling.
Counting the cost of recruitment
According to Oxford Economics, the average cost of replacing a single employee/staff member is: £30,614. This can be broken down into:
• Lost Output - £25,181
• Logistical Cost - £5,433
Let’s look at these in further detail:
Lost Output (lower productivity)
The biggest single cost associated with replacing an employee is the loss of productivity. Bringing on a new staff member, supporting them, training them and getting them up to speed costs man-hours. During this period, employees simply aren’t as effective as they could be. On average, it takes 28 weeks for an employee to reach optimum productivity.
Logistical Cost – (recruitment and temporary cover)
The secondary costs work out as follows:
• Temporary workers/cover: £3,618
• Marketing/advertising the new position: £398
• Recruitment fees/agency costs per candidate: £454
• Manpower cost of interviewing: £767
• HR/manpower cost of processing replacement candidate: £196
Reducing the impact
£30,000 is a significant amount of money for any business. Whilst it may be possible to shave a little off the logistical costs, it’s the lost output that is the most worrying figure. This makes up around 82.3% of the total cost, and there are several things that businesses can work towards to bring this down:
1. Reduce staff turnover
2. Increase the output of existing staff members
3. Reduce the time taken for employees to achieve maximum productivity
Number 1 is something every organisation should be taking steps to address. Whether it’s offering better remuneration, enhanced benefits and a clear route of progression, or developing the right company culture, there is lots organisations can do to improve employee retention.
For numbers 2 and 3, improving employee scheduling can make a real impact…
Increasing productivity through effective employee scheduling
Increasing productivity, both in terms of the existing team, and the new recruit, is perhaps the single most effective way to cut the cost of replacing staff members. Taking steps to introduce more effective employee scheduling systems will help organisations get more out of their existing resources. In some cases, it can even mean that employees don’t need to replace staff members at all.
The vast majority of UK businesses rely on in house systems and manual processes to handle their resource and staff scheduling. Shared calendars, group emails, multiple spreadsheets, planning boards and sticky notes – all tied together by a few dedicated members of staff.
Manual systems like these are inefficient and wasteful, and improving them lies in modernising, centralising and automating the scheduling process, by investing in dedicated employee scheduling software.
Saving money on staff replacement with Schedule It
Schedule It can help to cut costs throughout the staff replacement cycle, in terms of both logistical costs and lost output:
• Picking up the slack – reallocating existing human resources to cover the output of the outgoing member of staff until a replacement is found
• Scheduling interviews – minimising downtime and lost hours associated with arranging, sourcing and interviewing replacements
• Streamlined scheduling – making it much easier for new staff members to pick up in-house processes and complete essential training, cutting the time associated with on-boarding
• Improving output – reducing lost man hours, disorganisation and wastage, enabling existing and new staff members to achieve full output in a shorter time-frame
Ultimately, using Schedule It can help organisations to bring on replacements and bring them up to speed more quickly, whilst enhancing the effectiveness, productivity and output of the whole organisation.
Used effectively, employee scheduling can cut the time associated with bringing new staff members to full output by up to 78% - that’s a saving of up to £19,641 per employee. Want to know more? Find out about the benefits of 'Schedule it' today to see how it can boost your efficiency, awareness and resource allocation across your organisation.