Monday, November 20, 2006

Cost of Competency

One day, I started discussing with a smart guy (Rajan) about hiring and keeping employees. There was one very simple equation he provided was this.
If the cost of hiring, training new employee and getting him upto speed is higher then retaining and old employee, it is better to retain an old employee by giving him a one time bonus or a performance based bonus.

Not sure how many companies actually follow it.

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