Let's
look at some numbers:
The base salary for an
executive averages $189,543 for a $3 million company up to $268,092
for a $10 million company.(1) Six
months severance for an executive of a $10 million company will
cost a company $134,046 in salary severance, health insurance,
outplacement services and any bonuses or immediate vesting, plus
recruiting, hiring and training costs for a replacement and costs of
productivity loss. This seemingly small severance package could easily
run up a bill in the $300,000+ range. This doesn't even factor
in the hidden costs mentioned above.
Although the impact to your bottom line for a lower paying position is
less, there is often more turnover at this level, causing a
significant drain on your finances. The loss of three $32,000
a year employees, for instance, could easily add up to $144,000 or
more in replacement costs. And yet, candidates at this level are
seldom given the kind of thorough assessment that is
necessary. At all levels, turnover costs are a reality that you
can not afford to overlook.
So what's the answer?
It’s really this simple: Smart organizations select, hire, retain and develop the right
people and put them in the right positions. The best teams have great
players and those players are used correctly!
How can you make it happen for your company? Give us a call
at 410-499-0516 and we'll show you how.
(1)Data from the Economics Research Institute of Redmond,
Washington. (n.d.). Retrieved from Business Week,
August 8, 2000: http://www.businessweek.com:/smallbiz/0008/sb000808.htm?scriptFramed
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