Team Building Saves Where Hiring Spends
It's that time of the year, where businesses are cleaning up their accounts, checking which departments spent the most, where profits were made and where money was lost.
When it comes to team building it is so easy for businesses to say "It's not within the budget". It is especially easy when reviewing the books at the end of the year, if you saw loss of $X which just happens to coincide very closely with the amount spent staff events & parties.
But there is a major hidden expense which many companies are unaware of and it is often a major drain on a business.
Where can team building save you money?
When team building is done right and a company focuses on team building rather than team bonding (What is the difference you ask? Find out here) and they employ a company who works on delivering results, team building events are proven to help reduce staff turn over.
Staff turnover is a huge expense over multiple departments of ones business. A number of studies report the average cost of hiring one person is $5000. This cost is JUST the act of hiring.
The simple act of: posting a job ad, reviewing applications, replying to applicants, interviewing applicants, selecting candidate and welcoming new candidate can cost a business on average $5000.
Other studies have found the whole process from: having an employment void, downtime in production, hiring process, induction, training and up to the point when production is back on track can cost businesses between $20-$60K
When you look at your books and wonder if team building is in your budget, firstly you need to see how many employees you've hired to just maintain a functioning staff level (this isn't talking about growth).
Can you afford NOT to develop your team?
By neglecting your team there is a huge risk of problems occurring, which can result in high staff turnover, production downtime and loss of customers. This could have been avoided or at the very least reduced by investing in ones team.
Team Building events should be used as a proactive measure, rather than reactive. If you have a high staff turnover normally or regular staff issues you are already waiting money as you haven't solved the issues at hand.
Your team is like a piece of machinery, you maintain your fleet of vehicles, service your machines, clean your tools all in the hopes of not having issues and to ensure no downtime. This same practice should be applied to staff.
What did you spend last financial year?
Now that the financial year has wrapped up, ask yourself and run the numbers; How many team members did you hire just to maintain your staffing levels, to remain open, to deliver results to your customers?
This number you come up with is an amazing baseline for what you can spend on team building events, since you are already spending it just to hire new employees with zero gains.