The Hidden Cost of Turnover - Let’s make sure we hire the right person from the start!

In my many years as an HR Director in the hospitality industry, we hired and terminated a myriad of employees. Always behind and catching up on our work, it was difficult for me and my HR team to justify to our General Manager, the need to hire additional HR personnel for our department. I felt as though we were “spinning our wheels”, and could never pinpoint the actual “cost per hire”, to argue our need for that extra HR person.

On August 8th, 2016, SHRM (The Society for HR Management) came out with an “Average Cost-per-Hire”, showing how much money is spent in turnover. The cost-per-hire includes all of the time and effort it takes to replace an employee; an astounding average of $4,100.00 per hire.

Hire Correctly from the Start

I recall Department Heads telling me: “I need someone now”, or: “Why is this taking so long; I need staff!” These hiring managers should realize that the cost-per-hire hits directly the Company’s bottom line. They worked so hard in operations to increase revenue, but they did not understand the hidden costs of turnover.

Make sure your hiring managers understand that taking those extra few days in the due diligence process can save your Company money in the long run. Some HR best practices include checking at least three (3) references (not “friend” references, but former employer “supervisor” references), conducting a criminal background check and a drug test. Some employers also conduct credit checks when the position description includes handling money. The most important best practice however, is to make sure every single candidate completes an employment application. Make sure too that this application has the correct “legal language”, and include your “employment at will” statement.

Conduct behavioral based interviews. Past behaviors predict future behaviors… Make sure your interviewing questions are open ended, so that the candidate can effectively communicate situations that have happened in the past, and then evaluate those answers. Take your time… The candidate should be doing most of the talking, not you!

We offer “Interviewing Skills Training” to help companies stay out of trouble. Call us if you need guidance or consultation on how to reduce your turnover, and hire correctly from the start.

Client Highlight – James Beach

We are thrilled to highlight the famous James’ Beach Restaurant in Venice, California this month! We were introduced to James & Daniel back in 2014, when we assisted their restaurants with a full HR set up, including all HR forms, best practices, and new hire orientation. Today, we are working with James’ Beach again, assisting in “all things HR”; be it coaching & counseling, training, or just providing guidance and HR consultation regarding employee relations matters. It is a true pleasure working with this renowned & legendary Restaurant!

About James' Beach

James’ Beach opened in September of 1996, a ½ block from world famous Venice Beach and the Pacific ocean, taking over the location of the West Beach Café. James’ Beach immediately gained a reputation for great food, drinks and wine plus marvelous people watching. Los Angeles Times food critic, Irene Virbila reviewed that the straight forward cuisine, friendly service and beach ambience made James’ Beach “as comfortable as a favorite sweater.” That welcoming vibe, value and quality has made James’ Beach a favorite Venice neighborhood restaurant. Visitors come to Venice to be part of the artistic, eclectic scene and there is no better place to have a drink and people watch than at James’ Beach.

This may be one of the reasons that James’ Beach recently was awarded Open Table’s award for Most Vibrant Bar Scene. James’ Beach has been featured in feature films, television shows, and viral online videos like I Love You, Man, Californication, Curb Your Enthusiasm and The Women of L.A. as a Venice institution.

James' Beach
60 North Venice Boulevard
Venice, CA 90291
www.JamesBeach.com
310-823-5396

Highlights from our blog:

Diversity & sensitivity training.. Protect yourself against claims of hostile working environments, or harassment in the workplace! Create a welcoming work environment for all your staff. By appreciating the diversity in your workplace, your employees can feel accepted and comfortable in their surroundings. Learn more.

Safety tip: First aid kits. Abide by OSHA requirements. This act is a primary federal law that governs occupational health and safety in the workplace. The goal is to ensure that employers provide their employees with a working environment that is free from hazards which include toxins, excessive noise levels, heat or cold stress, as well as mechanical dangers. Learn more.

Employee or independent contractor? That is the question!. Understand the difference between employees and independent contractors. An independent contractor is someone who is independently in business for themselves. The employer does not control the worker but only controls the end results of the work that the independent contractor has been retained to do. Read more.

HR Compliance: Reporting new employees. All California employers must report new or rehired employees who work in California within 20 days of their start-of-work date. California’s new hire reporting program requires employers to submit the necessary documents to the EDD (Employment Development Department) prior to the 20th day of employment. Learn more.

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With Kind Regards,
EXECUTIVE HR CONSULTING GROUP

 Chantal Mariotti
Principal