How Financial Employee Turnover Affects Your Bottom Line
Financial professionals know how to calculate costs – it’s their job. But when it comes to employee turnover in a financial firm, the costs may be more complicated than they appear.
The Costs of Turnover
Many financial professionals understand the costs involved when an employee leaves the firm. There are the costs of the separation itself, the costs of executing a candidate search, and the costs of bringing a new person into the organization. The costs of replacing a financial professional may even exceed the new candidate’s salary in some cases.
Because these costs can be so high, many financial professionals believe that their goal should be to keep employee turnover as low as possible. By decreasing the turnover rate, these managers assume, the company decreases costs. In fact, the true calculation may not be so simple.
Managing Turnover Costs: Know When To Let Go
According to recent research published in the Journal of Management, a company that knows when, where, and how to focus on employee turnover stands a better chance of improving its bottom line than a company that fights to reduce or eliminate all turnover.
First, the study found that, between “voluntary” turnover and “involuntary” turnover, there isn’t much difference in profit. While it can help to weed out underperforming employees, performing this task alone will not maximize the benefits to the company’s bottom line.
Instead, financial firms and other companies should consider focusing their turnover-reduction efforts in the areas in which employee turnover has the biggest impact on company profits. For example, companies that focus on reducing turnover among quality and safety positions saw a much larger impact on profits than companies that fought to reduce turnover across the board, the Journal of Management found.
Where Should We Start?
Human resources and hiring remain two largely-untapped sources for addressing a company’s bottom line. To access the power of these processes to improve profits, speak to a staffing firm that specializes in working with financial companies and financial professionals. Your staffing partner has access to an extensive network and up-to-date information about hiring and turnover practices that can help your organization make the most of the people it has and find outstanding candidates.
At Daley and Associates, our experienced recruiters can help you reduce employee turnover and improve your company’s bottom line. If you are looking for executive recruiters in Boston, contact us today.
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