What's the real cost of employing a new team member?

by Lowri Allen May 24, 2021

Recruiting, training and retaining excellent talent has been a challenge for as long as I’ve been working in the Food and Beverage industry (I won’t say how long, but it’s more than 15 years!).

And while the number of people looking for a new role might be higher than usual right now, that is set to change – a recent CIPD report shows that 56% out of 2,000 employers surveyed indicated they are looking to recruit in the first half of 2021. https://www.cipd.co.uk/about/media/press/210221companies-report-strongest-employment-intentions#gref

Bringing in new talent introduces a wealth of new ideas and improvement opportunities. But new people also bring along their own ways of working, and sometimes bad habits. Without clear guidance on how to do their new job well, those bad habits will often become part of the new job.

A report from HR Review found that it costs over £30,000 to replace a staff member, and the biggest part of that cost is the lost output experienced while the new employee learns on the job. According to the report, for companies with more than 250 employees: ‘on average, workers take 28 weeks to reach optimum productivity which has an attached cost of £25,181 per employee’. https://www.hrreview.co.uk/hr-news/recruitment/it-costs-over-30k-to-replace-a-staff-member/50677

What if that 28-week learning period could be cut in half, saving £12,500 for every new employee? This is absolutely achievable, if you have a targeted induction plan and clear procedures in place.

Many new starters learn their job by shadowing others – or, if their fellow team members are too stretched, they are left to work things out for themselves. There will always be a need for training support from experienced team members, where critical thinking or specialised skills are required.However, many tasks are repeated daily, weekly or monthly (e.g. generating orders, communicating changes to customers or suppliers), and if the best way to do those tasks is documented, then the best results are achieved every time, ensuring that costs are minimised and customer service (both internal and external) is maximised.

By providing a new starter with best-practice procedures to follow as soon as they’re ready to start, they can use these to learn the best way to do a large part of their job, with far less involvement from the rest of the team on the fundamentals of the job. This approach ensures that the time spent with other team members focuses on the most value-adding part of the job, or having a relaxed chat over a coffee – instead of answering questions around how to fix an IT problem!

This becomes even more necessary in a remote working environment, where new starters can often feel isolated and unsure how to do key tasks in their job – for star performers, that feeling of not being able to learn a role quickly can be really frustrating.

If you’re looking to save £12,500 per new employee, then start training your new starters using best-practice procedures, in conjunction with a targeted 3-month induction plan which gives them (and you!) a clear view of their path to reaching optimum productivity in 14 weeks instead of 28 weeks.

If you’d like help setting up best-practice procedures and an induction plan, so that new employees get up to speed in half the usual time and with less support from your team, click on this link to book a free consultation call with me HERE.

All the best,

Sharon Cully

Director & Process Improvement Expert

Simply Processes