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What good people can really cost

Di Lee Sylvester, 14 Maggio 2003

Why does it cost so much to replace a departing employee? The total cost is so high because there are so many different costs, many of which are often overlooked. There are obvious costs such as advertising, but many people forget the hidden costs. Consider:

-Advertising or Agency Fees
-Time to review applications
-Time to interview candidates
-Accountancy procedures
-Intellectual Property lost
-Lower productivity of a new employee
-Time to train new employees

In hospitality, it can cost several thousand pounds in total to replace an employee. Therefore the key is to focus on retention of good employees. Many people are reluctant to voice their true feelings about leaving an organisation, so often the real reason is never discovered, and it could be costing an organisation thousands and thousands of pounds a year.

Recruitment is getting progressively more and more difficult. The following reasons are leading towards a skill shortage in the hospitality industry –

-Lowest unemployment for nearly 30 years
-Major increase of IT roles – all high paid attractive jobs for school leavers
-Ageing Population
-Change in Hotel Career Perception
-“Lifestyle” change – unsociable hours

Therefore, when you have a good employee, keep them. They will have skills, are able to train others, and provide a continuity for guests. Replacing employees is expensive, far more expensive than making them feel like they have a part to play in your organisation. Spend the time, and not the money, to take care of your employees.

Lee Sylvester – Deputy HR Manager
Human Resources
Jolly Hotel St.Ermin’s

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