In the USA employee turnover averages about 12% (and in the call center industry about 35%) and about 75% of “new” hiring is done to replace an employee who left, according to a 1996 study by William H. Pinkovitz, Joseph Moskal and Gary Green. Of course this was well before the current economic meltdown and certainly turnover has declined as people cling more tightly to the “security” of a paycheck. But downturns end and we can expect the numbers to trend back toward their typical values, possibly after a post-recession “spike” as people begin to bail out of jobs for ones they consider better.

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The cost of all this to a company is commonly estimated at about 150% of annual wages/salary (and 200%+ for sales and managerial positions), but obviously this will vary from industry to industry and even company to company within an industry group. In his article “The Cost of Employee Turnover“, William Bliss, President of Bliss & Associates, a Wayne, NY consultancy has enumerated the various components of turnover costs and concluded that replacing a $50,000 a year employee can easily cost a company $75,000 or more. Any way you slice this cake its big money.

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But what does this mean to you? What are your numbers? The Pinkovits, et al article provides a nice cost calculator that you can use as a starting point to make one of your own. Its worth the effort. It might just be a real eye opener.

In his excellent book First Things First, personal development guru Stephen Covey introduces the concept of a “Law of the Farm”. In a nutshell, this suggests the commonsense principle that if you want to reap wheat during the harvest season you had better be planting wheat now and caring for it in the interim. If you want wheat, you better not be planting corn. If you aren’t planting anything then don’t be surprised if your wheat crop is scanty.

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In his FurstPerson blog, Jeff Furst points out that those of us responsible for filling seats at a call center are very much in a “Law of the Farm” moment. Because the call center industry is one of the few that is still doing significant new hiring it is creating an upsurge in the number of job applicants walking into call center HR offices. He suggests that call centers use the current economy and general hiring slowdown  to become much more selective in who we bring aboard, with an eye toward improving performance and reducing turnover over the long term.

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This is good advice not only for call centers but for any industry that is fortunate enough to be looking to hire additional employees right now. This includes healthcare, insurance, home and garden maintenance companies, wireless telephony organizations and many sectors in the retail industry. You will also find that there are sales jobs open nearly anywhere. Anyone in the happy position of needing to hire should be viewing it not only as a short term applicant boom, but as an opportunity to pick and choose people who will be assets to the company for the long haul.

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What steps ought hiring managers be taking right now to ensure a great harvest during the coming recovery?  Mostly the obvious ones.

1. Remember that everything is temporary. Eventually the economy will improve, the applicant pool will shrink back to more normal levels, and a lot of those “easy” hires will be leaving to take what they see as “better” or “more interesting” work.
2. Take the time now to know…. I mean to really KNOW…. what it is about your top performers that make them your top performers. Frame this in measurable, objective terms that examine not only their job skills but the attitudes, behaviors and interests that help them to excel.
3. Use this information to create verifiable “profiles” of your most successful and valued employees and put your profiles to work for you in the selection and hiring process.

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A little extra work now will reward you with a bountiful harvest later.