With Workhuman solutions, reducing turnover and creating a thriving culture becomes simpler than ever. If you’re ready to re-imagine how your workplace can better support employees, request a demo. When you realize the true cost of employee turnover, the argument that you can’t afford some of these retention strategies becomes moot.īuilding a better workplace for your teams creates only positive benefits and savings for your organization. You can build your reputation as an organization people are excited to work for, boost the productivity of your teams, and spend less time developing and training new additions. Getting to work on your company culture can help you retain employees and reduce the cost of employee turnover. Improve company culture at your organization.Offer competitive pay and benefits to your employees.Use proven retention strategies, not guesswork.Benchmark your employee retention rates.There are steps you can take to help keep employees and reduce turnover rates: A low incentive for employee engagement.Too few career development opportunities.Below-average benefits or compensation.Here are some of the top reasons organizations lose their talent: Employees leave when they don’t feel valued by their employer, both monetarily and otherwise. Quit rates following the pandemic reached an all-time high, earning the phenomenon its own name: “The Great Resignation.” The reasons are myriad, but many have to do with satisfaction and culture. Why Do Employees Quit?Įmployees might quit for many reasons, many of which may be outside your control as an employer. Obviously, some turnover is expected because of poor performance or reductions in force, but beyond 10%, start evaluating what else is going on that’s causing your workers to leave. A good goal for your turnover rate should be about 10%. To determine your employee turnover calculation, divide the number of employees you lose in a month by your average number of employees. Numbers differ for different industries, so if you’re curious about how to calculate your own rates and costs, there’s a simple formula you can use. For an employee making $60,000 a year, that’s $45,000 to hire and train their replacement.īut there are less obvious costs, too, like how it can affect others within your company, its impact on your organization’s reputation, and the reduced productivity you’ll encounter while bringing a new hire up to speed. There are obvious costs, like posting the new position or using a recruiter, time spent interviewing, and time spent training.Īn affiliate for the Society of Human Resource Management calculated that it cost six to nine months’ worth of an employee’s salary to replace them. To know the true cost of replacing an employee, it’s important to look at more than just the cost of finding a new hire to join your team. So What Is the Real Cost of Losing an Employee? During the hiring process, not having someone in the position can mean missed deadlines and increased workloads on other employees. Other members of the team, after seeing the departure of a co-worker, can lose morale, which affects productivity too. Businesses lose productivity to the time employees spend training, mastering new systems, and learning to work effectively alongside their team members. It can take one to two years for a new hire to reach the productivity of an existing employee. For C-level positions, the cost is higher still - up to 213% of their salary. For those in technical positions, it’s 100% to 150% of their salary. There are various figures out there about the true cost of employee turnover, and even the most optimistic among them seems bleak.Īccording to, the average cost of replacing an hourly employee is $1,500. What’s more, high turnover rates can ruin your company’s reputation and hurt your ability to attract talent. While you can’t prevent everyone from leaving, reducing the reasons they have to leave can improve the satisfaction of everyone within the organization. This reflection can damage morale and hurt company culture. When employees see their co-workers leaving, they often take time to reflect on why. Here’s why: Employee Turnover Lowers Morale Reducing employee turnover should be a top priority for businesses. The solution can save valuable time, energy, and money, and implementing it is simpler than you might think. Those hidden costs can drastically affect companies’ bottom lines and company culture. There are many reasons most employers strive so hard to retain their employees.įor starters, the cost of employee turnover is often 1.5 to 2 times the amount of the exiting employee’s salary.īut there are hidden costs too - costs that extend beyond what it takes to advertise the position, train the new hire, and recover lost productivity.
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