For every organization, employees are the best assets. Yet companies layoff employees in tough economic times, as human resource capital is one of the most costly assets on the company’s balance sheet. According to the American Institute of Stress, U.S. industries lose around $7,500 per worker or $300 billion every year in employee absenteeism, employee turnover, diminished productivity, and direct legal, medical, and insurance fees associated with workplace stress. As a result, most companies opt for layouts when it comes to cutting expenses.
However, employee layout is not always the best bet. It may help organizations to reduce their costs initially, but they will have to recruit new staff eventually. The cost of the company for replacing staff is said to be around 30% – 50% of the entry-level employees’ annual salary; for mid level employees it is 150% and for specialized or executive level employees, the cost may go up to 400%. Worst still, 75% of the new recruits fail to meet the organizational expectations. In fact, the cost of replacing staff is much higher than sustaining your existing employees. All the money that an organization invests in hiring and training an employee is wasted by laying off stuff.
Employees are actually the best asset of an organization. They help the organizations to accomplish their goals. Employees, with their new and fresh ideas, help organizations to grow in customer acquisition. At the same time, they help companies to add new line of products and services to raise organizational bottom line. Thus, companies should start focusing on other business areas when it comes to eliminate expenses.
It is therefore essential for organizations to develop effective talent management process to nurture and sustain their greatest assets. In fact, creating a strong and engaging employer brand allows organizations develop high employee retention, attract best talents, and overall superior team performance. Likewise, it helps to deal with lack of employee motivation and eliminate growing employee dissatisfaction. Creating a winning employer brand allows the organization to attract the right talent. In fact, organizations backed by the strength of their teams can conveniently hire and retain top talents, which is pivotal to organizational success.
The present day economy has forced organizations to change their focus as well as investment strategies. The workplace culture now needs to focus on employee satisfaction, engagement, education, and retention. The value of employee involvement and retention is gradually increasing, which in turn, is creating dynamic growth in employee effectiveness and productivity.
To retain their best assets, organizations need to adopt innovative and simple processes for engaging employees. This also helps in creating a culture of sharing and growth that protects the organization’s investments, creating a better future for both the company and the employees.
To create employee engagement, companies need to build trust and commitment. And remember, actions speak louder than words when it comes to building trust. Listen and understand what your employees are saying or what they need and develop organizational strategies accordingly to nurture a culture of two-way communication.