Think you don't need to worry about employee turnover? Think again! Whether you have 2 employees or 20+ employees; high turnover can quickly eat up your profits.

Some employment specialists suggest it costs you anywhere from $500 - $2000 per employee. This includes the cost of recruiting, orientation and training. In speaking with cleaning company owners, the cost in our industry is closer to $500 per employee, so that is the number we'll use in our examples. In addition, turnover in this industry runs as high as 300%. That means that you hire and train 3 employees for every one employee you retain. So if you maintain a staff of 10 employees on average, you'll be sending out 30 W-2's at the end of the year.

Employee turnover doesn't paint a pretty picture when it comes to your bottom line. Let's run some numbers to see just what it's costing you.

Example 1:

To maintain a staff of 5 employees at 300% turnover, you'll be hiring and training 15 employees. The 10 extra employees you "turned" cost you $5000 (10 x $500).

Example 2:

To maintain a staff of 10 employees at 300% turnover, you'll be hiring and training 30 employees. The 20 extra employees you "turned" cost you $10,000.

Example 3:

To maintain a staff of 30 employees at 300% turnover, you'll be hiring and training 90 employees. The 60 extra employees you "turned" cost you $30,000.

Most cleaning business owners assume that high employee turnover is a fact of life and something they need to live with. But the successful business owners who follow the belief that they should "hire slow, and fire fast", know that high turnover doesn't have to be the norm. They've decided to focus their time on putting hiring systems into place and NOT hiring just any "warm body".

If you think about it, that $30,000 in our last example is money you could spend on a salary for an office manager or operations manager. How positively would THAT affect your bottom line?

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NOTE: If you'd like more information about keeping your employee turnover low, check out Dick Ollek's book, Finding, Training, and Keeping GREAT Service Employees 101.  

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Steve Hanson helps owners of residential cleaning companies build a more profitable and successful cleaning business through his online community at MyHouseCleaningBiz.com. Read inspirational cleaning success stories at www.cleaning-success.com/">http://www.cleaning-success.com, and sign up for House Cleaning Profit Tips at http://www.MyHouseCleaningBiz.com.