I got a call last week from a client who has only been with us for a few months. He started back in July of 2012 and just received his first few invoices from the new year. He was pretty upset that his state unemployment tax had gone up substantially compared to November and December. Being in the payroll business for about 20 years, and with this being about the tenth of these calls I’ve taken in January, I knew where this conversation was going to lead.

The first question I ask is "Did you know about the State Unemployment Tax Authority (SUTA) wage cap?" In Ohio, the employer is only charged SUTA tax on the first $9,000 in earnings for each employee.

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Earlier this month, our CEO went back to school.

Mike Kahoe, the founder and CEO of Group Management Services, attended Career Day at Bath School. He had the opportunity to speak to fifth-graders about his career and offer advice as they contemplate their future careers.

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Do any of these sound familiar?

• Losing good employees to competitors.
• A cranky work environment.
• Excessive workplace injuries.
• Out-of-control healthcare costs.
• Ridiculously high unemployment insurance costs.

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Once you’ve hired your employees, it’s important to keep them happy on the team. In addition to the cost benefits of employment continuity, there are also morale and productivity benefits.

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You work hard to recruit and hire the best employees that you possibly can. It’s only logical that you want to keep these employees engaged, happy, and working well on your team.

Employee turnover can be an inconvenient, time-intensive challenge. But employee turnover costs even more than time: it costs money.

Costs of Employee Loss

According to the Society for Human Resource Management (SHRM) and the Center for Community and Economic Development (CCED), turn-over rates are very costly for organizations.

The costs of employee turnover are both tangible and intangible. These costs include separation costs and replacement costs.

Separation Costs

Separation costs can include:

• Costs incurred for exit interviews
• Administrative functions related to separation
• Separation/severance pay
• Increases in unemployment compensation
• Lost productivity
• Lowering current employee morale
• Decreased customer service
• Disruption to the organization’s ability to operate efficiently and effectively
• Increased over-time or temporary employee costs
• Loss of workgroup synergy
• Performance differential (the loss of skills and knowledge between the separated employee and the new hire)

Replacement Costs

Replacement costs can include:

• Attracting applicants
• Entrance interviews
• Employment Testing
• Pre-employment administrative expenses
• Medical exams, drug testing, background checks
• Training costs

SHRM estimates that it costs $3,500.00 to replace one $8.00 per hour employee when all costs were considered. Of course, the higher the wage: the higher the turnover cost.

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Now you know the cost of employee turnover. Check back next week to learn more about how to prevent turnover by retaining great employees in Part II of this series: Employee Retention: Keeping Top Talent.

Recently, I turned 48. Forty years ago, the age of 48 looked and sounded ancient. When I hit my 30s, it no longer seemed so old. I’ve been seeing a lot of stories recently about people I know or know of who are dying in their 50s and 60s. As I look at my two daughters, I grow more concerned about the prospect of only being on this planet for another 10-15 years.

Every morning I curse my 4:55 a.m. alarm when it wakes me so I can meet my buddy Kurt for our 6 a.m. workout. Having a workout partner helps on those cold Cleveland mornings — and there are many! However, as I was making that trek in to work out, I thought how lucky I was to be working for a company that values employee wellness the way GMS does.

Healthy Employees are Productive Employees

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When an employee calls to say they woke up feeling like death warmed over, do you have to tell them to drag their butt to work because your company doesn’t have a Sick Time Policy? Or when you receive vacation requests, do you have to think twice about how to track it because your Time Off Policy is so complex? Unfortunately, many would answer yes to these questions because of inefficient Paid Time Off (PTO) Policies.

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Virtually every company in America is bound by the Federal Labor Standards Act of 1938 (FLSA).

This law "regulates the status of employees (versus independent contractors) and provides for a minimum wage and overtime unless the employee meets an exempt classification." However, the scope of this law is not simply limited to employees’ wages.

Protecting Whistle Blowers

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In a former life I was a general manager. A large part of my position was screening and interviewing potential new hires. This important yet time-consuming process included:

1. Phone screening
2. Background checks
3. Scheduling initial interviews
4. Clearing my schedule to make time for interviews
5. Conducting interviews

...you get my point.

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