Do you continue to struggle to find or retain workers? Are you having to deal with rising labor costs simply to hire staff? Is a lack of people power restricting you from taking on new business? Stop the vicious cycle and lean things out.
As the economy continues to grow, the availability of qualified workers continues to drop. United States unemployment rates have fallen to a 17 year low of 4.1%, with participation rates staying consistent at 62.7%. The number of unemployed people has dropped to a 30 year low, making hiring the right candidates virtually impossible without ballooning your labor costs.
The Society for Human Resources estimates it costs 38% of the person’s annual salary to replace an individual. The costs include recruiting, onboarding, and training. If your turnover rate exceeds the national average of 15%, the expense associated to the HR function, unemployment insurance, productivity degradation, and cost of nonconformance have become prohibitive. It is time to seek out new solutions.
Leaning an organization at this juncture of the new economy seems backward – but it is exactly the right thing to do. This is the time to eliminate those legacies, add automation, incorporate software solutions or simply jettison non-value-added business functions to help relieve staffing stress and improve near-term profitability. These items will also prepare an organization for an inevitable economic slow-down. We believe it is coming, we just don’t know when.
