Employee turnover is fast becoming a challenge for organizations around the world. In a report provided by the Hay Group, the turnover rate for the time period of 2013 to 2018 is anticipated to be 23 percent. A total of 192 million people will be heading out the door in 2018.
First, let’s take a look at the hard costs of high turnover. What is a company going to spend in order to compensate for low retention rates? According to a study by the Society for Human Resource Management, employers will need to spend the equivalent of six to nine months of an employee’s salary in order to find and train their replacement. Doing the math, that means that for an employee salaried at $60,000 will cost the company anywhere from $30,000 to $45,000 to hire and train a replacement.
Other research show that the average costs could be even higher. In a study conducted by the Center for America Progress, the cost of losing an employee can cost anywhere from 16% of their salary for hourly, unsalaried employees, to 213% of the salary for a highly trained position! So if a high trained executive is making $120,000 a year, the true loss could be up to $255,600 to the company!
The question that I ask then is whether or not your organization is ready to absorb these costs in order to stay afloat in today’s business economy. The story can have a positive ending if you are willing to take a journey. Let’s explore the “gift of mentoring” together.
Mentoring is undergoing a paradigm change. The focus is more on effective or modern mentoring versus the traditional style of mentoring. The traditional style consisted of the more senior person sharing their wisdom and guidance with a younger person. Fast forward to today and you have a two-way trusted relationship wherein both parties will learn and grow on a personal and professional level. This has changed the skill sets required to be an effective mentor and as a result has increased the business value that mentoring can bring to an organization.
Mentoring is a strategic tool that when done right, can attract and retain high-potential talent and accelerate leadership development and readiness. Mentoring is also an effective tool for shaping organizational culture and closing engagement and generational gaps. Employers are increasingly recognizing the benefits of mentoring in leadership development.
The statement “when done right” is so very true. Mentoring programs need to be aligned with business goals and they must also identify the goals that the program itself is hoping to achieve. Identifying which business problem or challenge you are hoping to resolve by implementing mentoring is one way to measure success and to ensure success. Properly matching mentors and mentees and providing training are two more requirements on the road to success.
Organizations that put into place a mentoring culture will have little difficulty in attracting quality young professionals to their organization. Providing these young professionals with a mentor who is focused on their personal and professional growth will ensure that these young professionals will stay with your organization for a long time. One of the young professionals that I am working with is with a large organization that does the right things when it comes to their people.
There is little doubt in my mind that attracting and retaining are first and foremost in their minds and their retention numbers would support that. They too have a mentoring culture and are always looking for ways to improve that culture.
A 2013 Vestrics study examined responses from more than 830 mentees and some 670 mentors participating in Sun Microsystem’s program. Employee retention rates climbed 69 percent for the mentors and 72 percent for the mentees over the seven-year period of the study. The increased retention resulted in a savings of $6.7 billion in avoided staff turnover and replacement costs.
Organizations that embrace the “gift of mentoring” when done the right way will be well on their way to addressing the challenges of employee retention and high turnover rates. Ensure that you decide which path you want to take – a mentor program or a mentor culture. I highly recommend that you do a culture assessment to determine mentor readiness within your organization.
I would also recommend starting with a mentor pilot program to get your journey started on the right foot and further solidify your chances for a great return on your investment in mentoring and your people.
Begin your journey today – “can you afford not to?”
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