The first step to running a successful company is to ensure that your offices are staffed by competent and motivated employees. The balance between keeping payroll costs as low as feasible and providing an adequate number of employees to work as efficiently as possible can be tenuous, and more employers are starting to face troubles when it comes time to replace a member of their staff.
Why is replacing an employee so difficult, and what steps are some organizations taking to mitigate this challenge?
The high cost of turnover
When a staff member leaves, filling that gap isn't as simple as putting out a job posting and sifting through the applicants to find the best fit. In recent years, rehiring has actually become more of a protracted and expensive process. A report from DiceHiring found that as of 2014, the average length of time it took companies to fill a recently vacated position was 25 days. In comparison, the same process took an average of only 15 days in 2009.
This extended search means more days spent operating at diminished capacity, equating to lost productivity and revenue. The Center for American Progress reported that it costs on average around 21 percent of an employee's annual salary for a company to find someone to fill a vacated spot in the roster.
New vacation strategies may provide an answer
With small businesses already operating with limited financial resources and the job market as competitive as ever, companies have to get creative with their incentives if they want to attract the best talent. According to Workforce magazine, some companies are going as far as offering new hires a pre-cation – a two-week paid vacation before their start date. The rationale is that it gives employees the chance to rest up and recharge before diving into the new job, and it's a benefit very few employers currently offer.
The source highlighted that pre-cations can actually be dual-benefit. It results in better-rested new hires, and in many cases, the employees feel a greater desire to work hard and be productive, since their employer has already invested in them.
The challenge of tweaking vacation policy in this fairly revolutionary way may be difficult for small-business owners to overcome on their own. Companies looking to reinvigorate their hiring process should seek the assistance of PEO companies. These organizations can offer powerful HR solutions without companies having to pay for their own in-house HR department.