The Impact of Job Hopping on Companies and the Cost of Hiring a New Employee

Job Hopping Losing Popularity as Companies Invest in Long-Term Relationships

In recent years, many people have been able to climb the corporate ladder from zero experience to managerial positions with high incomes by frequently switching employers. However, this practice, known as job hopping, seems to be losing its appeal. Companies are significantly changing their strategies and focusing more on developing long-term relationships. They are becoming wary of hiring newcomers who are suspected of leaving after just a few months due to the high costs involved.

Hiring someone who only stays in a company for a short period of time is financially expensive and uneconomical. Companies invest tens of thousands of crowns in recruitment alone, and hundreds of thousands are spent on employee salaries.

According to HR strategist Milan Rataj and co-founder of startup Sloneek, the return on investment for an employee, which is the point at which they start earning money for the company, usually takes years. This is in stark contrast to the mindset of the younger generation, who, according to numerous surveys, consider the optimal duration of employment to be exactly 12 months. After that, they move on to another job for more money, unless the new employer can “attach” them with meaningful work, a team, and a company culture.

“It is naive to think that a new employee can immediately start making money for the company in the first six months. While this may be true for some positions, in the vast majority of cases, the first year is essentially a balance for the new team member – the company invests in them for half of the year and recoups the investment in the other half. It is only in the second year, thanks to experience, that they become a fully integrated part of the team,” says Milan Rataj.

So, how much does it cost a company when someone with a gross salary of 50,000 crowns leaves a few months after the probation period?

Recruitment: 10,000 crowns for HR advertising, 14,000 crowns for position preparation and selection by the HR department (40 hours at 350 crowns/hour), 7,000 crowns for onboarding by the HR department (20 hours at 350 crowns/hour).

Salary: 250,000 crowns in salary (5 times 50,000 crowns), 10,000 crowns for the salary of a colleague “buddy” during adaptation (20 hours at 500 crowns/hour), additional thousands for the work of colleagues who have to fulfill extra tasks until the newcomer is fully integrated.

Total: 291,000 crowns.

Companies are becoming more adept at identifying job hopping tendencies in potential candidates, according to HR professionals. The cases where a newcomer receives the same or better salary than a seasoned employee are gradually decreasing.

“In the past, it was common in many places for a new employee to receive a better salary than a loyal employee. This naturally caused internal tension within companies. Today, this approach is declining, and companies are investing significantly more in their existing loyal employees,” notes Rataj.

According to him, a significant change is also the increasing reliance on data by employers. Companies that have information stored in their systems about the contributions, real experiences, and abilities of their employees know very well who to reward with what.

Job hopping is not the only problem that HR professionals encounter. Another pressing issue is the limited selection of candidates. Job seekers often have unrealistic financial expectations and are often surprised by the work pace expected of them.

TOP 7 problems that companies most commonly encounter in terms of HR issues:

1. Limited selection of candidates
2. Job hopping (candidate leaves immediately after probation)
3. Low technological literacy
4. Generational mismatch
5. Irrelevant financial expectations/benefit expectations
6. Low work experience compared to age (frequent job changes)
7. Low productivity or pace (candidate is surprised by the speed of work)

Source: internal survey by startup Sloneekáty
Nereálné finanční představy uchazečů
Nedostatek zkušených kandidátů
Náklady na nábor a adaptaci nových zaměstnanců
Nízká loajalita zaměstnanců
Nedostatek informací o přínosu zaměstnanců
Náročné pracovní tempo a očekávání

Podle personalistů se firmy stále častěji potýkají s nízkým výběrem mezi kandidáty na volné pozice. Uchazeči o zaměstnání často mají nereálné finanční představy a jsou překvapeni náročností a pracovním tempem, které od nich firma očekává.

Dalším problémem je nedostatek zkušených kandidátů, kteří by odpovídali požadavkům dané pozice. Firmy také čelí vysokým nákladům na nábor a adaptaci nových zaměstnanců, které se v případě job hoppingu stávají neekonomickými.

Nízká loajalita zaměstnanců je dalším problémem, se kterým se firmy potýkají. Zaměstnanci často přecházejí od jednoho zaměstnavatele k druhému za lepšími podmínkami a výdělkem. Firmy se však stále více zaměřují na investování do stávajících loajálních zaměstnanců.

Personalisté také upozorňují na nedostatek informací o přínosu zaměstnanců. Firmy, které mají dostatek dat o svých zaměstnancích, dokáží lépe rozhodovat o odměnách a benefitech.

Job hopping není jediným problémem, se kterým se firmy potýkají. Mezi další časté problémy patří náročné pracovní tempo a očekávání zaměstnanců.

How is the limited pool of talent in a highly competitive market affecting companies’ hiring strategies and the need to invest in long-term relationships with employees?

Find themselves in a highly competitive market, where companies have a limited pool of talent to choose from. This shortage of qualified candidates further emphasizes the need for companies to invest in long-term relationships with their employees.

To combat the challenges posed by job hopping and limited candidate availability, companies are taking a more proactive approach. They are focusing on employee development and retention, offering training programs, mentorship opportunities, and competitive benefits packages. These initiatives not only help attract top talent but also create a sense of loyalty and commitment among employees.

Additionally, companies are recognizing the importance of creating a positive and inclusive work culture. By fostering a supportive and engaging environment, they aim to not only retain employees but also increase productivity and overall job satisfaction. This shift in focus from short-term gains to long-term growth has the potential to benefit both employees and companies alike.

While job hopping may have been a popular strategy in the past for quick career advancement and higher salaries, it seems that the tide is turning. Companies are realizing the cost and disruption associated with frequent turnover, leading them to prioritize stability and loyalty. As a result, job hopping is losing its allure, making way for stronger and more enduring employment relationships.