How to minimize the cost and impact of employee turnover

Applicant Pools. Maintain an active file of individuals who might be candidates for positions in the organization. Better yet, encourage your best people to suggest candidates.

Celebration. Mark comings and goings with a simple party, a lunch, a coffee hour or some other special occasion. Celebrate the arrival of employees, and you'll help them quickly become part of the team. Celebrate their departure, and your employees may leave with good feelings, ready to recommend your place of business to others.

Contacts List. It contains information crucial to each employee's job: names, addresses, and URLs of customers and vendors… call reports for salespeople… product preferences… important customer correspondence. Keep each list handy and safe in case of departure.

Cross-Training. The rule of thumb: the more critical the skill or function, the better off you'll be if more than one person understands it. Cross-train your people in these skills and they'll function more effectively as a team - and they'll be better prepared for the day when someone leaves.

Curricula. If you don't have formal curricula for orienting new people, now may be the time to develop it. A combination of “live” training and self-paced study can bring new people up to speed and save thousands of dollars in lost time and productivity.

Essentials File. The essentials file, maintained for each critical employee, should contain a job description, reports completed by the employee, job tips, descriptions of resources the employee uses, and summaries of problems the employee encounters. The file will become a powerful continuity resource whenever an employee leaves.

Exit Interviews. They're great for identifying problems employees had while on the job, and for gaining insight into the way things can be done better in the future.

FAQ's. In this high-tech age, maintain a file of frequently asked questions on your intranet or your public e-mail folders. Jot a question and answer down whenever you encounter an important issue. One day, you'll be amazed at the size and depth of the file, and grateful that you have it.

Interviews. When new people start, let them interview their predecessors. When people reach milestones in the organization, such as annual anniversaries, let them share their knowledge in interviews with their peers. When people reach new pinnacles of achievement, let them share the background on their accomplishments with others.

Job Analysis. Every time an employee leaves, you have an opportunity to re-engineer duties and priorities, or even reallocate duties to others.

Knowledge Base. This “warehouse” of data contains critical information about the organization: financial performance, sales histories, customer data, work processes, products and services under development. Whether it's computer-based or paper-based, it's an invaluable continuity tool.

Orientation Program. A good orientation program packages information and ideas for new employees, and acquaints them with the history and culture of the organization.

Participatory Hiring. Allow your people to interview prospective candidates for the job. In addition to pointing out the candidate's strengths and weaknesses, they will feel more committed to working with the new employee once he or she is on board.

Process Book. This manual is a how-to-do-it reference guide to the employee's job. It contains information on all manner of tasks: how to retrieve information from the computer, team calendars, technical data… any key information the employee uses to perform the job.

Reverse Training. Encourage your supervisors to obtain informal training from their people. Why? It builds their own skills, and helps them prepare to train others.

Staff and Team Meetings. Yes, these routine meetings help maintain continuity. They're an opportunity for you and your team to learn about each other's duties. And written minutes of these meetings can become important reference tools.

Stories. Great organizations are filled with legends and stories. They speak of the founding, history and values of the organization and, continually repeated to new groups of employees, they transmit vital information about organizational goals and expectations.

Transition Budget. Occasionally, employers will set aside funds to cover the cost of employee transitions - so many dollars per employee, for instance. These funds help cover the cost of temporary employees, recruitment, training and other transition costs.

Weekly Appraisals. These informal “appraisals” give managers the opportunity to get to know their new employees, and give them quick feedback on how they're doing.

Separation costs (exit interviews, benefit paperwork, and payroll processing). ($500 - $1,000).

A temporary worker for an additional 30 days while the search for a replacement goes on. ($3,000 - $4,000).

Strained relations with several key customers. ($1,000 - $10,000).

The cost of running advertisements for new positions ($2,000 - $3,000).

Other recruitment costs, such as screening, reference checks, resume processing ($1,000 - $1,500).

New employee costs, such as business cards, telephone hookups, and payroll processing ($500 - $1,000).

Additionally, the employer loses:

The benefit of a training program it provided to Joe just several months before.

Valuable knowledge the employee has picked up over the years. The longer the employee's service, the more the employer loses.

The stress other employees feel when they attempt to pick up the departing employee's workload.

The loss of team camaraderie, common whenever an employee leaves.

Staff time involved in providing basic organizational orientation and training.

Valuable supervisory time in interviewing prospective new employees, and orienting the individual hired to the job.

Lower levels of productivity of new employees.