News, Insights and Best Practices for Manufacturing in Mexico

Utilize shelter companies to stay safe from employee turnover costs

29 Aug 2013

Category: Labor & Economics, Taxes & Finance

While the outlook for the U.S. economy is beginning to brighten, many organizations are still trying to keep costs low. However, it may be difficult to tone down spending if manufacturing companies are constantly being forced to replace key cog in the workforce. It takes a lot of time and money to recover from the loss of a top performer. In fact, many experts believe it costs, on average, 1/5 of a months worth of a staff member's annual salary until a business can resume as normal after employee turnover.

Turnover costs can drag down manufacturing firms
Productivity losses during training and recruiting are common effects of employee turnover, reported MoneyWatch. Companies are often troubled by these problems even more when a C-level staff member or top ranking manager decides to leave. A study conducted by the Center for American Progress revealed organizations can see costs up to 213 percent of the salary of a senior or executive level professional who have departed from the firm. Manufacturing businesses that have to incur these losses could be greatly affected financially, as well as when carrying out day-to-day processes.

Companies that are hoping to cut down on employee turnover have a number of different options. The CAP study showed offering sick days and giving staff members more flexibility can significantly reduce the number of workers who leave the business. Another way manufacturers can save money on turnover costs is to partner with shelter companies in emerging markets like Mexico. These firms give companies the opportunity to put more time and money into production, and take care of human resources management at a third-party facility.

Shelter companies help cut employee turnover costs
Manufacturing firms could still be impacted when losing a key executive, but shelter companies can provide a team of employees that can allow their clients to see high levels of productivity for other aspects of operations. Businesses that hope to reduce manufacturing costs should seriously considering offshore shelter programs in Mexico.

Human resources managers in an office south of the border will recruit top talent, conduct background checks on candidates, carry out orientation programs and coordinate business coaching initiatives. With an efficient staff assembled by a shelter company, manufacturers will be able to trim budgets, while remaining efficient.


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