One tough truth of HR management: employees come and employees go—even if your company is a perfect personnel paradise and you treat your staff like royalty. Factors on the company’s half of the equation (poor performance, for example) and reasons on the staff side (moving across state lines, retirement and more) mean it’s a fact of workplace life that sometimes an organization and its people have to go their separate ways.
Now, an even tougher truth: that turnover can be very expensive. According to Gallup, the average cost to hire and bring an employee on board averages at a whopping $4,129. What’s more, because as they say time is money, the 42 days it take to fill the typical open position, that’s even more off your firm’s bottom line. While even if your organization does everything in its power to stop it, turnover happens. It’s wise to do what you can to avoid the pile of related expenses.
How turnover adds up
The price tag of finding brand-new workers to replace ones that walk out the door comprises more than just placing an online job ad. Although recruitment is part of the cost, there’s much more at play:
Recruiting and hiring
In addition to buying ads to lure hopeful replacements for job vacancies, there’s also the wages spent by HR management and other personnel on time required to craft the ad. Also, the time and expense required to comb through applications, interview, conduct background checks and pre-employment testing factor in.
Orientation and training materials also require time and financial investment. This remains true whether your company leans on online, software or otherwise automated/self-guided training, or if they take a face-to-face approach with senior staff training the new hires.
Effects on remaining staff
It’s easy to forget (but important to remember) that losing a colleague and getting familiar with a new one impacts the rest of your team. There’s extra work (even overtime) during the hiring process, cross-training to familiarize the new hire with other systems and departments, checking the added employee’s work, and more.
Odds are that person you just hired didn’t arrive already a total expert about your company and the way things operate. They’re going to take time to learn the ropes, achieve the ideal level of productivity—and they’ll make mistakes along the way.
Work to avoid turnover
The good news is, while it’s impossible to totally prevent turnover, there are things that HR managers and higher ups can do to minimize them. One key is to work to ensure employees at every level feel valued and a part of the organization. Research shows companies that place an emphasis on increasing employee engagement reap a number of benefits:
- Turnover is reduced by an average of 24%
- Absenteeism falls 41%
- Productivity surges by 17%
Creating that kind of employee-friendly environment requires additional time and, more than likely, financial outlay. However, consider that replacing a lost worker costs more than $4,000 on average—and that an full-time employee can bring in revenue amounting to several times their salary—and the effort suddenly makes a ton of sense. Some solutions to explore:
Encourage work-life balance
Stressed-out employees are likely to exhibit lower productivity, and if they feel overwhelmed, they’re 31% more likely to jump ship if they’re pulling their hair out at their desk on a regular basis.
Every employee needs guidance at least occasionally, but don’t overdo it—workers with hovering bosses and little freedom are 28% more likely to consider leaving.
It’s a smart move to create opportunities for networking, teamwork and socializing. Having work friends (or at least coworkers with whom they’re friendly) can help an employee feel more connected and loyal to your company and stay longer.
Minimizing turnover is smart, but it can be a formidable challenge, even for the most experienced HR professional. Human Elements is here to help—contact us for valuable resources and solid advice.