High employee turnover can have a devastating impact on your company’s bottom line, not to mention on your team’s morale. It’s estimated that the average cost of a departed employee is 38% of their annual salary. When someone leaves, you’re looking at lost knowledge, training costs, interviewing expenses, and recruitment costs that all add up to a lot of money, time, and energy. Here’s why high turnover can seriously hurt your company and what you might be able to do about it.
Hiring is expensive. It takes up time, attention, and money. You have to either post the job opening or use a recruiter, account for the time it will take to scan resumes and schedule interviews, and seriously evaluate and consider each candidate and make the best decision to help grow your company. The longer you leave a position empty, the longer someone else will have to complete their tasks, lowering your productivity and costing you more money.
It gets contagious
Just because one person suddenly leaves your company doesn’t necessarily mean the floodgates will open and everyone will leave, but it does mean that people will at least consider leaving. They’ll think about where their coworkers went and wonder if the grass is greener on the other side for them do. Are they also missing out on a great opportunity?
It strains remaining employees
On average, it takes 45 days to hire a new employee, so what are you supposed to do in the meantime? More than likely, you’ll have to push some of that employee’s responsibilities onto your remaining employees, which can be stressful and overwhelming for them. And some of them might be pushed to leave just for that reason. After all, why should they be punished because they chose to stay?
It lowers morale
The more people that leave, the lower morale will drop. It means that more and more work will get dumped onto the rest of your team, and they’ll start to adopt the mindset that all their old coworkers are out making more money and enjoying a better work environment while they’re stuck suffering at your company, doing more work than ever for the same pay.
Stop the leak
The good news is that you can fix the problem! Make your workplace as ideal as possible and train your managers to strive for effective leadership. Cultivate happiness and goodwill as part of your mission statement and build community with a purpose. Respect your employees’ time by making sure they have downtime in the evenings and on weekends. Allow personal freedoms like remote work, which shows trust respect. Provide adequate training, professional development opportunities, mentorship programs, and chances for career advancement. If you get to the point where you’re trying to lure them back with a counteroffer, it’s probably too late.
For more tips on retaining your best employees, contact Pridestaff Thousand Oaks today.