Berks & Beyond Blog

While retention is a hot buzzword these days, you can’t talk about retention without talking about turnover. Do you realize how much it’s costing you? Turnover costs most companies thousands if not millions of dollars a year – but most employers don’t realize it!

Companies routinely record and report costs such as wages and benefits, workman’s compensation insurance, utilities, materials and space, yet most companies have no system in place to track and report the cost of employee turnover.

How to Estimate Turnover Costs

• SHRM, the Society for Human Resource Management, once estimated that it costs $3,500.00 to replace one $8.00 per hour employee when all costs — recruiting, interviewing, hiring, training, reduced productivity, etc., were considered. But SHRM’s estimate was the lowest of 17 nationally respected companies who calculate this cost!

• Other sources estimate that turnover costs you 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees.

• Do a quick calculation: Think of a job in your organization that has experienced high turnover, maybe supervisors. Estimate their annual average pay and the number of supervisors you lose annually. If their average annual pay is $40,000, multiply this by .125% (125% of their annual pay). The result? It costs $50,000 to replace just one supervisor. If you lose ten supervisors a year, you’re spending $500,000 in replacement costs just for supervisors. And that’s the bottom line cost. The top line cost? If the company’s profit margin is 10%, then it costs $5,000,000 in revenues to replace these ten supervisors.

Do These Numbers Seem Unbelievable?

Actual turnover costs are usually much higher than we think they are.

If you want to find out exactly how much turnover is costing your organization, find an online employee turnover calculator. Just remember that only tangible costs can be calculated on these sites. Intangible costs are just as real and sometimes much greater than quantifiable costs, but they are difficult if not impossible to measure.

Why Don’t More Companies See This as a Costly Problem?

Many companies don’t realize the true cost of turnover, which costs companies in both expertise and dollars, because they have never examined it. Here are five possible reasons:

1. No process is in place to tabulate the costs of turnover.

2. If they are measured, those costs are not reported to top management.

3. Employers think it’s an inescapable cost of doing business — but it’s not!

4. Everyone thinks it’s an HR problem, but it’s really a strategic issue requiring top management and HR’s combined attention and actions.

5. Costs are underestimated, so they don’t cause concern.

How Can You Measure Turnover Costs in Your Organization?

A comprehensive program measures the following costs:

• · Separation costs
• · Replacement costs
• · Training costs
• · Vacancy costs

Separation costs include:

• costs incurred for exit interviews
• administrative functions related to termination
• separation/severance pay
• any increase in unemployment compensation.

Replacement costs include the cost of:

• attracting applicants
• entrance interviews
• testing
• preemployment administrative expenses
• acquisition and dissemination of information.

Training costs include both formal and informal training costs. Vacancy costs include the net cost incurred due to increased overtime or temporary employees needed to complete the tasks of the vacant position.

How can you reduce turnover?

When turnover costs are unacceptably high, do an assessment. Find out who is leaving and why. Exit interviews can help you gain information. Then develop a retention program based on your findings.

You can always contact Berks & Beyond to find out how we can help lessen your turnover costs!

At Berks and Beyond, we want to make staffing simpler and more effective for you.  When your challenges are complex, we can provide the expertise you need in all parts of the personnel cycle – from position description through orientation – to ensure a successful match.  The following case study demonstrates our results at work:

The Problem:

A Reading, PA employer was facing a difficult – albeit positive – problem.  Due to high business volume, their plant manager was shouldering too heavy a workload.  HR was tasked with creating a new position in their plant to ease the demand on the plant manager.

The Solution:

Our staffing specialist met with this client three times to learn about the company, the personality of the plant manager and his immediate business needs.   Working together, Berks and our client solidified the job title, job description and primary responsibilities.

Because of the service we provided, our client decided to work exclusively with us to find the perfect match for their new position.  We conducted interviews to initially screen potentially qualified candidates and then referred only the best to our client.

The Results:

Working exclusively with Berks and Beyond enabled our client to hire the perfect person for the position.  We saved this Reading employer time and money, by not having to advertise, sort through piles of résumés or pre-screen candidates.  As an added benefit, the plant manager was free to stay focused on his core job responsibilities during a critically busy period.

In Our Client’s Words:

“Berks and Beyond was the perfect solution for our temporary work force needs.  With great enthusiasm for their work, they helped us create a quality temporary work force at affordable prices.  They made it easier than I had anticipated. Not only did Berks and Beyond help us with our temporary staff, but they also shared  ideas which will enhance the effectiveness of our workforce.  I am thoroughly impressed with how quickly they came to our rescue.  They met all of our requests faster than we anticipated – a rare occurrence with most businesses today!  It is always a pleasure doing business with Berks and Beyond!”

Write Your Own Staffing Success Story

Contact Berks & Beyond today to find out how we can deliver real Results at Work for your organization.

Need a little help getting into the holiday spirit?  Check out one of these upcoming holiday events in central Pennsylvania:

Wondrous Mystery Christmas Concert

Oasis Ministries for Spiritual Development presents the Lancaster Chamber Singers. This choral concert will include works by such composers as Rutter, Sweelinck and Poulenc as well as Jeffrey Van’s Carols for Choir and Classical Guitar, featuring guitarist Anthony Derico.

Date and Time:  December 11, 2011, 3:00 p.m. (doors open at 2:30 p.m.)

Event Phone:  717.737.8222

Event Website:  Wondrous Mystery:  A Christmas Concert

Venue Website:  Camp Hill United Methodist Church Website

Ticket Price:  $15

__________________________________________________________________

Hersheypark Christmas Candylane

Enjoy the magic of the holidays, Hershey style, with 2 million twinkling lights, rides for all ages, festive decorations and Hershey’s Product Characters decked out in their holiday best!  Attractions include: sing-along at a heart-warming Christmas show, A Rockin’ Music Box Christmas; visit Santa’s reindeer (sponsored by U-GRO Learning Centres); browse quaint village shops; ride over 30 rides including the family-favorite, Twilight Express.

Date and Time:  December 3, 2011, 12:00 p.m.

Event Website:  Hersheypark Christmas Candylane

Admission:  Please see website for ticket prices and Family 4-Pack specials

__________________________________________________________________

PA Christmas & Gift Show

Christmas Shop at one of the largest holiday shows in the country!  Visit The Pennsylvania Christmas & Gift Show, a festive celebration of the season’s finest decorations, arts & crafts, cuisines and musical and dance groups.  Among the unique and exclusive gifts available are crafts, jewelry, clothing, Christmas decorations, toys, household accents, ceramics, furniture, dolls, flowers, paintings, holiday foods and much more.

Event Dates:  Now through December 4, 2011

Event Phone:  717.233.5100

Event Website:  PA Christmas and Gift Show

Location:  Pennsylvania Farm Show Complex and Expo Center, 2300 N. Cameron St., Harrisburg

Are you capitalizing on new recruiting and interviewing technology like Skype, Twagalus and Twubs?

The names may sound bizarre, but the power they afford recruiters and HR managers is no joke. If your company wants to remain competitive in recruiting top talent, it’s time to pay attention to these emerging media:

Remote Interviews

Online interview technology has revolutionized the hiring process.  This cost-effective tool allows you to rapidly connect with viable candidates anywhere, while greatly simplifying interviewing logistics.  Instead of spending valuable time and money on travel, you can now use services like Skype and TokBox to virtually meet applicants and determine their potential early on in the recruiting process.

Mobile Technology

According to statistics from Pew Research Center, 83 percent of Americans own cell phones.  Nearly half of them (44 percent) use their mobile devices to get access to the internet.  Leverage mobile technology to reach potential job seekers anytime, anywhere by sending text alerts about your job openings and recruiting events.  Additionally, you may want to consider making your website more “smart phone friendly,” so that it facilitates the job search and application processes.

Video

Digital video enables you to get your company’s message across like no social media tool can.  By allowing candidates to literally see and hear what the true employee experience is like, video offers a powerful way to influence and engage potential candidates:

• Use online videos to enrich your online job postings.
• Add video clips of your offices, production facilities, etc.
• Interview current employees about what it’s like working for your organization.
• Demonstrate ways you take care of your employees, work for the greater good and/or stay on the cutting edge of your industry.

To ensure your videos are viewed, add them to your homepage, job postings and social media, or use QR codes to direct job seekers to them.

Twitter

Twitter can help you contact candidates in real time by instantly broadcasting or “tweeting” available jobs.  If you have a Twitter account:

• Search for relevant hashtags that qualified candidates might be using and integrate them into your tweets.  Tools like Search.Twitter.com, Twubs and Tagalus can help you identify hashtags your target candidates may be using.
• Shout out new job listings.  Services like jobshouts.com and jobamatic.com allow you to automatically feed new job listings to your Twitter account.  You can even add custom prefixes and hashtags to make the content more user-friendly and searchable.

Making changes in the way you recruit can be intimidating; however, you need to embrace emerging media to remain competitive.  Thankfully, you don’t have to do it alone.  As a leading employment agency in Southern Pennsylvania, Berks & Beyond leverages cutting-edge recruiting technology to help you win the war for talent.

With staffing offices in Harrisburg, Allentown, Pottstown, York, Reading and Carlisle, we are strategically located to provide you with the most highly-qualified and trained professionals available throughout Central and Southern Pennsylvania. Contact Berks & Beyond today!

Effective interviews are essential to making good hires.

As an interviewer, it’s your job to create the framework for the discussions you have with job candidates.  Although the process may become tedious at times, you can ensure hiring success by employing methods that are consistent and provide a thorough understanding of every candidate you interview.

During each interview, ask the following questions to be sure you’ve covered all your bases – and increase the likelihood that the candidate you select will accept your offer:

1. Explain employment gaps. In some cases, a gap in employment can be easily explained.  The candidate may have moved, returned to school or experienced a major illness, for example.  In other cases, however, a break in work history may be a major red flag.  If an applicant has a gap on his résumé, it’s your responsibility to determine whether or not it’s a cause for concern.  Address the issue early in the interview process, to avoid wasting time on a candidate you wouldn’t ultimately hire.
2. Whether or not the candidate is interviewing somewhere else. How would you feel if you spent months finding the right candidate, only to have that individual choose another job offer?  Know where you stand from the outset by asking an applicant upfront if he is applying to other jobs – and if so, where he is in the process.  You’ll save yourself countless headaches down the line.
3. Why the candidate applied for the job. Asking a candidate why they applied provides valuable insight into his motivation.  His reasons may be personal, or they may connect him to your company (e.g., his experience with your brand or your organization’s role in the community).  While any variation of these answers is acceptable, be wary of the applicant who says he’s in it for the money.  If a competitor offers more, your new employee may be the first one to head out the door.
4. Commute time. Asking questions like, “How long does your daily commute take?” and, “How long are you willing to commute?” may seem innocuous, but they are essential.  If he currently commutes 15 minutes and your organization is 45 minutes away, he may be using your position as a back-up.  Avoid a surprise at the end of your hiring process by having a clear idea how far each candidate is willing to travel to get to work.
5. Compensation history. Make sure you clearly understand each candidate’s total compensation, including bonuses, benefits and additional reimbursements such as mileage, cell phone, etc.  Some candidates may inflate their previous compensation to receive a better offer, so be proactive and ask for a complete, detailed history during the interview.  When it comes time to make a final hiring decision, you’ll be better equipped to assess candidates side-by-side and know how to structure a fair offer.

Looking for more interviewing and hiring help?  Check out these earlier Berks & Beyond posts:

Five Tips to Improve Your Hiring Process

Common Hiring Mistakes – and How to Avoid Them

List of Interview Questions to Avoid When Hiring

Make Hiring Simpler – and More Effective – with Berks & Beyond

If recruiting and hiring take a toll on your organization, or if you simply need more time to focus on your business, call Berks & Beyond.  Our team of recruiting professionals will:

• listen to your needs;
• shorten your time to hire;
• present only qualified candidates who have been well-screened;
• reduce the burden (and expense) of recruiting and screening candidates on your own.

Contact us today to learn more about Berks & Beyond’s direct placement services.

Are you familiar with Senate Bill 128?  If you regularly check job applicants’ credit as part of your screening process, you should be.  Senate Bill 128, if passed in it’s current form, would prevent employers from using consumer reports unless the information is either substantially job related (and the reason for the use of the information is disclosed in writing), or required by law.

The National Conference of State Legislature’s (NCSL) website indicates that changes in credit screening legislation are occurring from coast to coast.  Seven states now limit employers’ use of credit information in employment: California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington.  To date, 58 bills in 28 states and the District of Columbia were introduced or pending in the 2011 legislative session.

Connecticut’s new credit screening law went into effect just a few days ago, on October 1, 2011.  Their law bars mandatory consent to credit checks by employees and applicants for all but a few types of employers.  Since then, California has also banned most employers from running credit checks on job applicants, and at least five more states are also considering similar bans.

Is our state next?

As an employer in Pennsylvania, you still have the right to check a job candidate’s credit.  Before you do so, however, you should consider:

• how relevant the information you’re collecting is to the available position;
• the cost involved versus the benefit to be gained;
• whether or not your internal staff is trained in how to interpret the complex information contained in today’s credit reports;
• whether or not there may be potential adverse effects to checking an applicant’s credit.

While the use of credit checks as an employment screening tool has grown over the past several years (with some 60 percent of U.S. employers using credit reports for some or all of their background checks), this practice is now becoming illegal for many employers.  In the future, it will be interesting to see if and how this ban will help people with financial problems find employment.

What is your take on the new credit screening laws?  Will it affect the way you screen and hire candidates?  We at Berks & Beyond would like to know.  Please leave your comments below.

“The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working.”

—President Barack Obama, September 8, 2011

In a time when some workers are living week to week, paycheck to paycheck or day to day, President Obama claims he can help our ailing economy by: introducing new tax cuts to help small businesses hire and grow; putting workers back on the job while rebuilding and modernizing America; creating pathways back to work for the unemployed.

Here is what President Obama says his American Jobs Act will do, if it is passed in its current form:

• Lead to new jobs for construction workers, teachers, veterans, first responders, young people and the long-term unemployed.
• Provide a tax break for companies who hire new workers or raise workers’ wages.
• Cut payroll taxes in half for every working American and every small business.
• Repair and modernize at least 35,000 schools.
• Give companies extra tax credits if they hire veterans.
• Give companies a $4,000 tax credit if they hire anyone who has spent more than six months looking for a job.
• Extend unemployment insurance for another year.
• Jolt our stalled economy and give companies the confidence that if they invest and hire, there will be customers for their products and services.

Follow this link to read the full text of the American Jobs Act.

Follow this link to read the short fact sheet for the American Jobs Act.

Follow this link to watch President Obama’s American Jobs Act speech on September 8, 2011.

What will the American Jobs Act mean for your business?  That depends upon whom you ask.  Here are two differing perspectives:

From Mokoto Rich (New York Times):

“The dismal state of the economy is the main reason many companies are reluctant to hire workers, and few executives are saying that President Obama’s jobs plan – while welcome – will change their minds any time soon…The plan failed to generate any optimism on Wall Street as the Standard & Poor’s 500-stock index and the Dow Jones industrial average each fell about 2.7 percent.”

From Dan Pfeiffer (The White House Blog):

“Today, we’ve seen reports from economic analysts and statements from CEOs.  All of their statements underscore the same message: the American Jobs Act will create jobs and is good for the American people.  It will grow the economy, help middle class families and strengthen communities across the nation.”

As you can see, opinions about the potential effectiveness of the American Jobs Act vary greatly.  The fact is, Pennsylvania employers won’t know for sure how it will impact business until Congress passes it (and there’s a chance it may not even pass).

In the meantime, Berks & Beyond continues to help drive the recovery.  We deliver customized staffing solutions to help Central and Southern Pennsylvania employers achieve sustained business success in a volatile economy.  What can we do for you?  Contact Berks & Beyond today.

Berks and Beyond Employment Services, Inc. Relocates Carlisle Office to Accommodate Rapid Growth

Carlisle, PA –Berks and Beyond Employment Services, Inc. is pleased to announce the relocation of their Carlisle, Pennsylvania branch.

The staffing and placement firm, which currently serves much of Southern and Central Pennsylvania, is moving its Carlisle office to keep pace with the rapid growth they have experienced since opening just eight months ago.  Located in the Historic District, the new Carlisle location will provide greater visibility and much-needed room to grow.

Although relocating so soon after opening was not Berks & Beyond’s original plan, President Chris Garner couldn’t be more pleased with the turn of events.  “The support that our clients in the Carlisle area have shown us has been tremendous,” states Garner.  “In return, we are renewing our commitment to this market by expanding our staff and office space.  The new Carlisle office will help us supply our valued customers with the quality of employees they have come to expect from Berks & Beyond.”

Berks & Beyond’s new Carlisle branch will open after the Labor Day weekend at 300 South Hanover Street, Carlisle, Pennsylvania 17013.  The larger facility will create two new full-time positions and will continue to provide clerical, industrial, managerial and technical staff for temporary, temp-to-perm and direct placement.

While Berks & Beyond currently provides staffing solutions to employers throughout much of Central and Southern Pennsylvania, the new location will further broaden the company’s service area to include the following towns and cities:  Harrisburg, Camp Hill, Mechanicsburg, Middlesex, Mount Holly, Boiling Springs, Shippensburg and Newburg.

It’s been about six months since Berks & Beyond last reviewed Reading’s BLS economic statistics.  At that time, we were hoping that 2011 would usher in a cycle of renewed economic growth – but improvements were still lagging in our part of the state.

This time around, we’re seeing a “mixed bag” of economic and employment numbers yet again.  On the upside, the Reading MSA’s unemployment level is down 17.9 percent from where it was a year ago, dropping from 20,400 in March 2010 to 16,700 in March 2011.  This is substantially better than the state of Pennsylvania as a whole (down 14.8 percent) as well as the nation (down 10.3 percent).  But while total nonfarm payroll employment is up by over 1 percent for both Pennsylvania and the nation, Reading’s nonfarm employment actually dropped by .1 percent over the past year.

To see just how the Reading area stacks up against Pennsylvania and the nation, download the “Reading,Pa.pdf” file on this Selected BLS Economic Indicators page, last updated May 2, 2010.

For comprehensive employment statistics, follow this link:

Bureau of Labor Statistics Reading PA: Nonfarm employment and labor force data

Want to learn more?

Contact us and a Berks and Beyond staffing professional will show you how our services can help you make the most of our current economy – by saving you money, reducing your risks and keeping your workforce lean and flexible.

According to a recent article by Dan Miller posted on pennlive.com, experts say that the midstate jobless rate will be better this year.

Ryan Sweet, an economist who covers Pennsylvania’s midstate region for Moody’s Analytics, sees encouraging signs that private-sector hiring is picking up – although it’s not gained enough momentum to substantially lower unemployment yet.  Sweet predicts that unemployment in Central Pennsylvania will begin falling in the second part of 2011 and that conditions will continue to improve, if slowly, throughout 2012.

To see how the Harrisburg-Carlisle Metropolitan Statistical Area (MSA) has fared over the last few months, download the “Harrisburg-Carlisle.pdf” file on this Selected BLS Economic Indicators page, last updated January 19, 2011.

The Harrisburg-Carlisle MSA’s unemployment rate was 7.4% as of November 2010 – slightly lower than both the state of Pennsylvania and the nation as a whole.  For comprehensive employment statistics, follow this link:

Bureau of Labor Statistics Harrisburg-Carlisle, PA: Nonfarm employment and labor force data

Want to learn more?

Contact us and a Berks & Beyond staffing professional will show you how our services can help you make the most of our current economy and get poised for the recovery ahead.