The average cost of recruiting a new employee in the UK was £30,000 in 2014. The figure is comprised of 2 factors.
- Cost of lost output while a replacement employee learns the business and becomes familiar with the role and responsibilities.
- Logistical costs of recruiting a new worker (including advertising, agency fees and time invested interviewing prospective candidates).
The majority of the cost, around £25,000, is the time it takes for a new employee to reach the required level of productivity, which is an average of 28 weeks.
So, doesn’t that make the argument for having an internal succession plan and talent development strategy a no brainer?
While it is true to say that every organisation needs some ‘new blood’ to ensure new ideas are generated, competitor advantage maintained and the status quo is challenged there are more than financial benefits to investing in the development of existing employees.
Other reasons to grow your own include:
Risk management – the retention of top talent increases and the organisation becomes more aware, and therefore prepared for, talent loss risks.
Readiness – as new business challenges arise your top talent will be better prepared to meet them, which means faster delivery and business growth as well as more successful internal career transitions.
Development funds invested wisely – leadership development is tied to future leadership talent needs, to employee career interests and to actual succession plans for specific competency growth.
Reduced opportunity loss – the time it takes to fill open positions is significantly decreased, which also reduces lost business opportunities.
Increased engagement and productivity – supporting your employees’ development and career helps them feel valued and invested in, which means they generally enjoy greater levels of job satisfaction, higher motivation levels and give more.
If you think about it, if you can identify, develop and retain your internal talent, and ensure that happens in an environment that fosters engagement and productivity, all the other business goals you are striving to achieve will naturally follow.
What makes you different from your competition is your people; they are your most valuable asset.
What does the talent development plan look like in your organisation?