Ep 52 // The True Price of Losing an Employee (There are SEVEN costs)

NOTE: Please excuse any errors in this transcript; it was created using an AI tool. Akua Nyame-Mensah 0:07 Welcome to the open door podcast. My name is Akua Nyame-Mensah. I also respond to Aqua and I'm a certified executive and leadership coach recognised facilitator and former sort of leader that loves supporting reluctant buyer fighting and overwhelmed leaders. I've worked with them to help them clarify where they should focus their time and energy each and every day so that they can love themselves, love their work, and ultimately love their life. If you're looking to learn leadership information and hear different perspectives, you are in the right place. My aim in this podcast is to help you see that one of the most productive and profitable things you can do is deeply understand yourself. Understand how you show up, understand how you thrive and allow yourself to align everything in your work in your life, and in your business to support that think of this podcast as your weekly opportunity to receive leadership support. And remember, there is no one right way to lead yourself or others. Thank you so much for taking the time to join me today. Let's get started. Hello, and welcome to this week's open door conversations podcast episode. I am really excited about today's podcast episode. It is once again a repurpose live that I did a few weeks ago. But it got so much engagement because I think it's such an important topic for all of us leaders to keep in mind. So whether you're a business owner, you're a middle manager, you're a founder, okay, a C suite exec, it is so important that you recognise that retention is a key component of being able to build a sustainable and scalable business. So in today's podcast episode, I talk about the seven costs you pay when you lose one employee. So if you're interested in hearing a little bit more about noxious the cost of losing an employee, but some of the things that you should keep in mind and implement as you engage with them. Keep listening. Hello, hello, happy Monday Aiko here, I also respond to Aqua and a Korea. So today, my topic is something I am incredibly excited to talk a little bit more about. With the work that I do. A lot of times I get asked, you know, why is it so important to take leadership? Seriously? Why do you focus on leadership? Why are you focused on the people at the top instead of the people at the bottom? Right? So a lot of the people I support tend to find that the issues are with everyone else, right the issues are with the team, the issue are with you know is with the employees, it's not with me, and woman things that I'd love to teach is really just the importance of recognising that as a leader, right, you can play a massive role, and whether or not your team is able to go to the next level. So really just recognising that, as a leader, there is so much, right. So so much that you have an impact on and how you show up the perceptions that you have, the stories you tell yourself are a massive part of that. So today, we're gonna be talking about the true cost of losing an employee. And according some of this research that I found online, from a really interesting, a human being who worked at Deloitte, there are seven different costs, I'm sure that we could combine somewhere we could maybe add to them. But I think ultimately, at the end of the day, the thing that we need to recognise and the thing that we need to get all comfortable wrapping our heads around is that there are so many more cost to losing a person than we sometimes realise. And that is not to say that people should not be let go. That is not to say that everyone that you bring onto your team will be able to add to your bottom line or really add to your business. But it's so very important to get very curious, especially if you see that we have a retention problem especially we see that people are leaving or complaining about certain things. So a lot of times I hear this and this is something actually that I was told when I first started off as a, you know, a co founder and managing director, someone who was launching something that was new. And the thing that we hear a lot of times as founders is that we should constantly recruiting, and that we should constantly be hiring as a founder. And I really disagree. I don't agree with this. And I think that what it does is it forces people to focus more on those who are entering than those who are actually already through their doors. If anything, as a founder, you should be focused on retention and focus on building processes and structures. But if you are overwhelmed, if you're overworked, if you are burnt out, it's really difficult for you to do that. And the only thing that you can sometimes see is that ball that's directly in front of your face. And that's why it's so important for you one to build your self awareness and become aware of how you're showing up and what's happening, because that's going to have an impact on how you engage with others, and also how you set out expectations for others as well. So really just recognising where you are at and that that can impact how you show up is a massive part of this. Alright, so why should we care? Why should we even have this conversation? Or why should I even be sharing this information? It's so important because research shows that losing an employee can range from 10s and 1000s of dollars to over two times the employee's annual salary. And if you're working at a fast growing startup, and you don't have much in terms of resources, losing an employee can be huge. Not only do you lose the entire, you know, institutional knowledge, do you lose the processes this person might have been involved in, but you also lose the little bit of resources that you're able to invest in them. Alright, so what I'm gonna be doing, and I mentioned this earlier on, but in this live stream, I'll be sharing the seven cost of losing an employee, and what you really should be focusing on, if you'd like to take this conversation to the next level, you're always welcome to reach out and happy to jump on a little leadership review call with you. But really just recognising that it first starts with cultivating your self awareness, and really getting curious about whether or not this is an issue. Okay, so I just wanted to share a little bit more about my background, and why I feel like I'm someone who can speak on this beyond some of the research that I've done. I've also personally experienced a lot of hiring. And I'm not necessarily proud of this part. But I've experienced a lot of hiring and a lot of firing. And I've, you know, hired and fired hundreds of employees between Ghana and Nigeria, and I've worked with tonnes of different service providers in my own business now. So I've also left amazing paid opportunities myself for different reasons. And for some of the reasons that I that I will share in a few minutes. So really just recognise that within this super interconnected world that we now live in, it's so easy to lose employees to other opportunities, right? If anything, right, we're competing against so many other opportunities. And right now, right, when we talk about the great reshuffle or the great resignation, it's really a time where employees are reflecting on the types of work that they're doing, and really reflecting on their personal lives and seeing whether or not there's an opportunity there for them to find something that has a little bit more of alignment. Right. Another thing that's coming up and I had a conversation with the founder about this recently is that some employees are also attempting to work at several places at once, right. So you know, when we talk about losing an employee, though, I'm focused primarily on employee and an employee that leaves you maybe in a lurch or that is potentially fired, we also need to talk about the fact that there are employees that you might be losing through disengagement, right. So there are employees that you might be losing, because they've found other opportunities, but they're not going to stop working for you as well. So they're trying to take advantage of those places. And that can also be an issue for your bottom line, that could also be an issue for your company, if they're not able to keep up with both. Alright, so what are some of these costs, right? And what are some things that really happen when you do lose an employee, so let's get into them. So the first one here, and I think the key thing that we need to keep in mind, right, depending on where you are within your business, or what level of leadership that you're at, you may find that you spend more time or less time within some of these different situations. But the first thing really just to recognise that there is a cost to hiring a new person. So if you're within a fast growing startup that's really, really small, that cost is going to come from you, it's going to be your time. So it costs time and energy and also resources, right to advertise for that position to interview for that position, right to screen, and then to finally hopefully, you know, onboard them. And that's the second cost that I have on here the cost of onboarding a new person. And I think that so many companies can do a better job of that. I know that something that I had to learn the hard way, when I was running a fast growing startup, really just recognising that that onboarding process, right, that's probably where you're going to be a little bit more hands on, where it's going to take some extra energy potentially right, some extra training, some extra management, right? Once again, that is you time. So that's something that you're going to lose if you lose, if you lose an individual or the individual is disengaged. The next one I have on here is loss of productivity. And that's something that I talk a lot about, right. So the importance of engagement for performance and productivity. So a new person can take one to two years to reach the productivity of an existing person, right. And so once again, a lot of these stats are coming from more corporate and more structured environments. So imagine what that could look like within your startup, right. So once again, within a startup, a lot of times, things aren't structured, things aren't necessarily written down. So it can become even more of an issue even more lost productivity within a much smaller startup. And that's why it's so important to take the time and energy to make sure that you have a very good hiring process and to make sure that you have a very good onboarding process. That way, a person it does not get wrapped up within your company. If they're not someone who can really add to your bottom line or really add to your business. They're leaving, they're out the door before they become someone who's incredibly important and that has institutional knowledge. The next one I have on here. Number four is loss of engagement and psychological safety. And this is something I think that is really key and that we don't always think about as leaders right? We Think that you know, it's going to be fine, people will get over it and no one will talk about it. And the reality is that other employees will see this high turnover, right. And they might take this as a signal that something's wrong, whether or not they're aware of it, their stories, they might tell themselves, and that could lead to disengagement, and a loss of productivity as well. So just keeping that in mind. Next, I have on here, and that's number five is errors and mistakes. So when you have someone new join the team, they are more likely to make mistakes, more likely to have errors. And this means that that's not necessarily great for your customers and people maybe who are engaging with individuals within your business. Alright, the next one I have on here, number six is the training cost. So depending on how long an employee has been within your business, you've probably spent a lot of time and energy, whether it's you as the founder, or somebody else within your team, or external sort of consultants and trainers that you've brought on, that's going to be lost when you lose that employee, once again, whether they're moving to another opportunity, or if they're disengaged, not focused on the job that they've been given within your business. All right, this last one I have on here, once again, it's a little bit more intangible. But I think it's still really important for us to keep in mind, as founders, as business owners, and really, as leaders is recognising that there is a cost to culture, right? So even beyond that psychological safety and that point of psychological safety, there is a cultural impact, right? So whenever someone leaves, there is going to be questions, people want to talk about it. And people are going to start to also reflect on their own position within the company and ask why, right? What happened, why. And so it's so important that if you do lose an employee, or you have to let go of an employee, that there is some level of conversation or communication around that as well. So really just keeping those things in mind. So those are the seven costs that come with losing an employee. And once again, I think that in this time that we're in, it's really important to note that this could be losing an employee to another opportunity outright and directly, but these same costs can also come from losing an employee to potentially, you know, another remote opportunities. So they're only sort of focused on the job that you've maybe hired them for, for, you know, a short period of time. And then the rest of the time, maybe they're spending it on this other remote opportunity that they've found someplace else. And once again, as I've mentioned that something that I've been talking to a lot of leaders about, right, the fact that maybe they have this person on their team full time, but that same person on their team is also working for this other team and another country, maybe even another continent full time as well and trying to benefit off the both. But they're not seeing the productivity, they're not seeing the same level of output at that as they did in the past. And so that I would also consider losing an employee as well. All right, so what can be done, right, I always think it's really important to share, you know, what's maybe happening to build your awareness around what's potentially happening, but what can you do about it, if you recognise that you're having retention problems, and that there's issues here, if you want to be very proactive, one of the things I talk a lot about recently, it's going from reactive to proactive. So you want to be proactive? What are some of the things that you can do about it? So I just wanted to share some of the things that I think employees want you to keep in mind as a leader, a founder, a business owner, maybe even an investor that's maybe supporting another business, what will employees want you to keep in mind. And when I reflect back on my own time, when I was working for other organisations full time, these are things that were really important to me as well. So let's share, let me share a little bit more about what that could look like. I think the first thing that's really important to keep in mind is employees will stay right, it's so much easier to retain employees when they feel valued. And when we talk about value, I think it's also important to talk about feeling appreciated, and and also acknowledged, I'm sure I did a live not that long ago, or maybe I have a podcast episode about this, where I talk a little bit about how sometimes we focus so much on sort of the financial return in terms of what we're giving to employees. And sometimes employees just want to be treated like human, they want a simple thank you, they want to be looked in the eyes, right? They don't want to be lied to. And that's enough for some employees. So I think that if you want to make sure that you're creating that psychological safety, if you want to be able to retain the right employees, it's so important that you make employees feel valued and appreciated. And the way to do that is by engaging and asking them what they want, and then setting the expectation that that's something that you can do for them. Another thing that you probably want to keep in mind. And once again, this can look very different depending on the type of work that you do. And the type of work maybe that that individual does is employees want to be well paid. One of the things I hear a lot from individuals that are sort of being challenged right now by the rise of remote work and the opportunities that are there for people all around the world to work pretty much anywhere is this idea that they feel that people are potentially leaving or not leaving, but taking on other full time opportunities because they're being paid in a currency maybe that's a little bit more stable. And I think that that's a fair thing to keep in mind and a fair thing maybe to assume. But there might be other things going on there. And that's why it's so important to engage and create that safe environment. So you can have a conversation with a member of your team. If you notice that this is something that's happening, right. Employees also stay places where they are mentored, and they're coached. And they feel like they're getting something out of that opportunity, right? So they're mentored, they're coached, they're trained, there's so many things they can get out of this, and they can maybe use for the next opportunity that comes around, I think, for me, specifically, and this might not be for all employees. And that's why it's so important to have the conversation. But I really like being in places where I'm challenged. That's one of the reasons why I really love working for myself, because every single day is a bit different. And I'm constantly challenged outside my comfort zone to make money for myself. And I think that's really, really fun. Another thing, I think that's really, really important for employees, especially within maybe smaller environment, or within startups, is to make sure that employees have an understanding of what the next step is or what the next level is within their position. So employees feel safe, they feel more secure when they know that, hey, if I'm working within this analyst position, right now, there's an opportunity for maybe for me to move into that associate position within XYZ time. I know those of you listening to this, that maybe are working within a startup or a founder, you might say to yourself, I don't know. And that's something that also potentially would need to be communicated if you want to be able to retain the right individuals. Because within a startup, you want to make sure that you are attracting people that have the right risk profile, that are excited to work with in a space maybe where things aren't as straightforward and where things could shift and change. And they're fine with that risk. So once again, it's really important to be able to communicate that. Alright, the last things I have on here is employees like opportunities where they're involved. And this is really key. And I think that once again, when it comes to thinking about how do you set expectations for employees, making sure that they have an understanding of how what they're doing has an impact on the bottom line can really go very far, to help to motivate them and help them to continue to work, even if maybe they're not being paid as much as they could be. Or maybe even if they feel like they're not in the perfect position. So really just recognising that by creating an environment that's challenging, involved, where they feel appreciated, it can actually go really far to help you retain employees. And even if they don't feel like they can stay there, at least they'd be open to having a conversation with you about, hey, I'm moving to the next step. Or, hey, you know, this is maybe not the best place for me anymore. So at least you can plan. And at least you'll be able to move forward knowing that you've created an enabling environment, but it's maybe not the best fit for them moving forward. So that's all I think I wanted to share with everyone today. Thank you so much for joining me, if you have any thoughts, any questions, anything that you think that I missed, you can feel free to let me know in the comments. But I thought it was just really important to just share a little bit more of what happens when you aren't really focused on creating one that enabling environment and you aren't really focused on retention, if anything, it's really by focusing on retention, you know, onboarding, right processes, and structures that's going to allow you to attract the right people in the long term. And that's gonna allow you to get your business to the next level. So once again, thank you so much for joining me on this Monday. I really appreciate it and I hope that you enjoy the rest of your day. Stay safe and say thank you so much for taking the time to listen to today's episode. If you enjoyed what you heard today, please share it with your friends. We can continue this conversation on social media the links to my socials so that is LinkedIn, Instagram and Twitter. You can find them in the show notes. If you tagged me in a story and include the hashtag hashtag ask Akua I will share a special little gift with you. Thank you so much once again for your time and I cannot wait to share my next episode with you stay safe and sane.