The high cost of a misplaced talent decision
Most are well aware that the workforce in a service or knowledge-based organization typically represents between 70-80% of an organization’s structural cost. This figure alone captures a company’s attention when making talent decisions, but there are substantial risks beyond base wage costs that organizations face following a poor choice of location.
Lack of evaluation or experience can place clients in locations that are too competitive, creating high levels of turnover and wage pressure. Turnover has both an indirect operational and direct financial impact to an organization. This year, The Work Institute estimates there will be an annual turnover cost of $680B.
When decisions are solely based on broad population metrics or wage rates, the consequence is hindered efforts to ramp up or sustain workforce demands that impact growth and revenue.
It is critical to understand an organization’s human capital strategy to avoid such pitfalls, including their tolerance for competition, compensation philosophy and sourcing pipelines. JLL then takes a multifaceted approach to assess talent markets. Bringing experience in labor analytics and location strategy to our clients makes them more prepared and avoids unnecessary risk.
To understand more on the risks of misplaced talent decisions, contact Business Consulting. Our team is dedicated to ensuring clients achieve success in their location decisions.