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Sacramento, CA (Grassroots Newswire)  – Analyzed research conducted by The Entrepreneur’s Source indicates that a large percentage of start-up businesses and small businesses find it challenging to hire talented employees and retain them.

Jim Kinghorn, Sacramento business coach from The Entrepreneur’s Source, says, “Many firms fail to grasp the value of human capital. Money goes down the drain when the wrong person is chosen, and many businesses struggle with inability to retain talent. Unfortunately, the lack of employee continuity and poor training affects all aspects of the business, thereby affecting a company’s longevity.”


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Many businesses spin their wheels trying to find employees perfectly suited for their jobs, Kinghorn said. However, the right combination of skills and personality can be hard to find. Therefore, when the process fails, they spend several months and 30 percent of the salary trying to replace the bad hire.

The Heldrich Work Trends Study, published by Rutgers University, reflects this data. According to the study, 57 percent of companies with 100 or more employees have had difficulty hiring workers with the required skills. In effect, a significant amount of productivity is lost due to vacant positions. Each year, about one-third of the workforce changes jobs largely to take advantage of better opportunities. The average cost for hiring a new employee is about 30 percent of the worker’s annual earnings. A large percentage of firms find they are not prepared to deal with this “revolving door” situation.

There are many reasons why an employee chooses to leave a job. Research firm Sibson & Co. cited that the top reasons include:

1. No one listened to their needs
2. They were not offered the chance to learn new skills
3. They were given too little time away from work
4. There was no form of written appreciation during their tenure
5. The workplace was unsafe
6. There was a complete lack of challenges on the job

Domineering personality, ineffective leadership and poor communication are some of the major barriers that occur between a company’s management and staff, Kinghorn said. Some employees may never reach their true potential because management doesn’t understand how to address the challenges of different personalities, and when leaders don’t know how to connect with people, the flow of work stops and hard feelings set-in. Without effective leadership skills everyone suffers and productivity plummets.

However, with the right guidance, written and interpersonal skills, and formal training, start-up businesses and small businesses can overcome these obstacles, Kinghorn added. The Entrepreneur’s Source is a leading coaching and advisory firm that specializes in helping business owners remove the blinders, see their company more objectively and make fact-based decisions to increase performance.

“The mismanagement of human capital is the main reason that ‘good’ companies never become great,” said Kinghorn. “Leadership plus networking and teamwork equals the solution for making the best of your company’s human capital.”