While most define cost by the number written on a price tag, economists say that a truer measure of an item’s price is its opportunity cost. Opportunity cost accounts not just for an item’s market price, but includes the value of what must be given up in order to make that purchase. For example, the true price of going to college encompasses not just the already high costs of tuition, housing, and books, but also the value of the salary you would’ve earned if you had decided to go straight to work.
Many employees consider opportunity costs when deciding whether or not to leave their jobs. In order for workers to decide to remain in their positions, they must feel that their current job outweighs their next-best options. Countless organizations have high employee turnover rates because they fail to make their employees feel this way. In fact, 2 out of 3 millennials report that they want to leave their companies by 2020. Failing to retain these employees drains precious company time and resources. Fortunately, there’s a solution.
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