The prospect of hiring new personnel can be overwhelming. It’s large investment with a substantial amount of risk. According to Mercer’s 2015 Turnover Survey, in 2014 the average involuntary turnover rate in the U.S. topped 6%, while voluntary turnover topped 13%. That means about 1/5 of all workers leave a company in a given year. According to the Society for Human Resource Management (SHRM) it costs an average of six to nine months’ salary to replace an employee.
To give an illustration, imagine hypothetical company ABC Corp. which has 1,000 employees, with an average salary of $40,000 per year. If the company experiences the average turnover rate, it will have to replace 200 employees in a given year, and will cost $4,000,000 to $6,000,000. From this example it can easily be seen how costly employee turnover can be, but how can these costs be reduced? One of the major ways to do so is to outsource certain activities to advisory firm instead of bringing on a new employee.