Key employees are the staff who have a strong impact on the production and management of the enterprise, and can hardly be replaced within a short period. They are the undertakers of the core competence, and they are the foundation on which enterprise existence and development should rely. Currently, managing human resource effectively is becoming more and more important in an environment that is getting more and more competitive. The costs of losing employees, recruiting, interviewing and training new employees often exceed the annual remuneration for the lost position (Allen, Bryant, & Vardaman, 2010). In addition to these direct financial costs, the turnover of the key employment will not only lead to work disruption, but also leak the commercial secrets and core technologies of companies, which will destroy the cohesion and affect the enterprise strategies. Companies therefore are developing strategies so as to minimize the costs associated with this turnover. The project will examine how managers and HR professionals can effectively and strategically retain the key employees (Bryant, & Allen, 2013). Compensation policies, training and corporate culture are all reliable ways to deal with this problem. In this essay, the problem caused by key employee turnover will be addressed, and then several countermeasures will be examined. In the final part, some of these solutions will be evaluated.
2.1. Replacement Costs.
The cost of employee turnover often ranges from 50% to 200% of the employee's annual salary based on the type and level of job he/she holds, which includes the cost of advertising, interviewing, loss of productivity and other related fees.Losing key employees dose even more damage than that of typical employees.(Scott, McMullen & Royal, 2012). For example, the expenses of hiring new physicians might include the costs of advertising and interviewing for open positions as well as the travel expenses.