Congrats to Elgins Plastics. What a wonderful sto...

Congrats to Elgins Plastics. What a wonderful story (for a change). So often, employees do not feel any ownership in the business. This great company has learned a valuable lessons that most do not. All managers know that turnover is expensive. However, as managers, we have not done our jobs very well. Ask any managers if they believe turnover is costly, and they will get to sputtering and slinging words yet not be able to quantify the estimated costs. Don’t believe me? Go out and survey your top managers. If you research this area, you’ll find a wide array of answers ranging from the ridiculously low to the outrageously high. The cost of turnover can vary greatly—estimates of turnover costs range from ten percent to two hundred percent of annual compensation. The hidden costs are more difficult to estimate and include customer service disruption, emotional costs, loss of morale, burnout/absenteeism among remaining employees, loss of experience, continuity, loss of “corporate memory,” workers’ compensation expenses, relocation costs, interview time, advertising, recruitment fees, lowered quality standards, poor community image, etc. Indeed, I don’t believe you can ever capture all of the true costs of turnover. At best, it is only going to be an educated guesstimate. I personally like the one-third rule, that is, turnover costs about a third of the annual salary of the person you are replacing. This is probably too low, but we have to start somewhere. Michael L. Gooch, SPHR author of Wingtips with Spurs: Cowboy Wisdom for Today’s Business Leaders http://www.michaellgooch.com