Table of Contents
- Why Does Employee Turnover Matter In The M&E industry?
- What Causes Employee Turnover?
- Calculating the Cost of Losing an Employee
- Total Cost of Hiring an M&E Specialist
- Key Takeaways
The cost of turnover in the monitoring and evaluation industry is extremely high; it’s estimated that losing an M&E specialist can cost 1.5-2 times the employee’s salary. That is good for recruiters, but not so good for your business. When it comes to those of higher seniority and the technical level of their job description, the cost fluctuates.
When you lose a monitoring and evaluation professional, these are not the only costs. You now must dedicate time and resources to recruiting, onboarding, and training a new hire – and that is just the beginning! After an employee leaves, your business simultaneously takes a hit internally while the role remains unfilled. These expenses are known as the cost per hire and the cost of vacancy- not to mention opportunity costs. It’s estimated that 2/3 of all sunk costs due to turnover are intangible, including lost productivity and knowledge, which are part of the cost-of-vacancy and opportunity costs. In the M&E industry, there are also contractual deadlines that add to the cost when you do not have the right management or labor in place to complete a job. About 1/3 is lost (invested) in recruitment or cost to hire.
Let’s take a look at some of the hidden costs associated with turnover in the monitoring and evaluation industry.
Why Does Employee Turnover Matter In The M&E industry? #
Studies show that the cost of a bad hire can be as much as three times the position’s base salary. Research also shows that people fail in a position for different reasons from the criteria used to select them.
Employee turnover can cost companies in the monitoring and evaluation industry millions of dollars and countless hours that would be more impactful in other business areas. When you know that the most significant causes that lead to employee turnover can be prevented and managed, you increase your ability to retain key employees.
Direct and indirect costs will rise if a company’s employee churn rate continuously grows or stays above the desired level. As mentioned, the cost of turnover can equal up to one-third of an employee’s base salary and can be broken down between hiring, benefits, training, and onboarding costs.
What Causes Employee Turnover? #
Studies show that at any given time, 51% of workers are actively looking for new job opportunities in the M&E industry. This statistic makes it no surprise that managing attendance and employee turnover are on every hiring manager’s mind.
Many organizations believe that employees leave jobs primarily for better wages, benefits – or both. The reality is that these factors only account for 35% of employees’ decisions. The actual causes are quite different than what you would expect.
#1. Poor Job Fit
Based upon several thousand exit interviews, employee turnover research shows that one of the primary causes of top-performer turnover is poor job fit. HR specialists found that one-third of employees quit because they felt they could not grow their skills or career in their current roles. Employees in the monitoring and evaluation industry become frustrated when they can’t do the job they want to do.
Overcome this problem with a talent audit that can identify sources and causes of failure for each position and the key skills to overcome those failure points. It can also assess the incumbents against the skills that ensure success and provide a guide for conducting exit interviews, documenting turnover causes, and establishing a plan to reduce those defects.
#2. Incompatibility with Management
As with any organization, the responsibility to correct incompatibility between subordinates and management lies with management. Ideally, the process should be that management conducts an analysis to determine which managers are best in which job, managing which people.
By identifying which managers are likely to thrive in any given role, monitoring and evaluation companies can improve the job match of managers and M&E specialists, reducing unwanted turnover and continually engaging employees.
However, relatively few superstars leave due to tension with their supervisors. Most managers have their hands full dealing with more significant problems. Even when superstars bend the rules (and they usually do), their contribution is too valuable to disrupt.
Calculating the Cost of Losing an Employee #
The costs to meet an organization’s needs rise when employees leave a company. The longer it takes to fill a role, the more likely current employees will need to take on additional responsibilities, leading to attrition and burnout. The true cost of employee turnover includes more than a potential loss in revenue.
- Recruiting Costs: Advertising available M&E positions, interviews, screening, and hiring.
- Onboarding Costs: Training, usually by management, can take away from other vital responsibilities.
- Lost Productivity: Current projects may be halted, or existing employees find themselves filling multiple roles as new hires are brought up to speed.
- Opportunity Costs: Time, sales, and customers can be lost while training a new hire.
- Cultural Impact: The stress associated with turnover can lead current employees to question if a company is the right fit for their goals. Employees are also at risk of feeling overwhelmed, leading to disengagement and decreased productivity.
Total Cost of Hiring an M&E Specialist #
One of the most valuable talent analytics measurements is the cost-per-hire. This formula empowers recruiters to know the true cost of hiring monitoring and evaluation specialists and strategize using their hiring budget.
The cost-per-hire divides external and internal recruiting costs by the total number of hires needed.
- External Costs: Job postings, advertising, background checks, background checks, assessments.
- Internal Costs: Internal recruiters, employee referral bonuses.
Key Takeaways #
Generally, it takes an average of 42 days to fill an open position in the monitoring and evaluation industry. Once an ideal candidate is hired, it takes six to eight months to reach full productivity. The opportunity costs lost during this time are further compounded when considering the costs attributed to the hiring process. These costs range between $2,792 and $4,425 per employee. Simply put, the average cost to replace an employee can be expensive.
Understanding the costs of each stage in the hiring process provides the opportunity to carefully plan how an organization’s needs can be met when finding the right candidate.