- Tim Kastle
The Cost of Losing an Employee
The most important element to thrive in today’s business world is retaining the best employees. This is especially critical for small businesses that are competing with larger companies with bigger budgets. When it comes to employee retention, offering your employees personalized benefits for them and their needs, is as crucial as ever.
Voluntary turnover has a very negative impact on employees quality of life and overall productivity as well as the company revenue. Hiring and onboarding new staff costs companies time and money. The cost of employee turnover is all over the board. According to the SHRM, they predict that every time you replace a salaried employee it costs about 6 to 9 months salary. Many believe it costs even more—around twice their annual salary, especially for higher positions.
It's so hard to effectively predict the true cost of the loss of an employee. There are so many intangible and untraceable costs that come with employee turnover. But, turnover can be easily avoided by providing employees with great benefits.
Employee turnover is still very relevant with 27 out of 100 employees voluntarily leaving their jobs. As turnover continues, this trend could result in a 35% turnover rate by 2023.
The “real” cost of turnover:
Advertising, interviewing, screening, and finally hiring.
Onboarding and training as well as management time.
Lost productivity: it takes new employees time to get their feet underneath them. It could take as long as 2 years for a new employee to meet the same productivity levels as your previous employee.
Lack of engagement: when employees see high turnover, they tend to disengage and lack productivity.
Errors: new employees take longer and aren’t as adept at problem solving in an efficient manner.
Training: at least 10 to 20 percent of an employee's salary is invested in their training.
Overall impact: when a coworker leaves, other employees wonder why they left.
Good practices on retention:
● Be aware of your employee retention rate
● Don’t assume your employees are happy where they are. Provide communication channels to get their feedback.
● Implement a health benefits program
● Provide more personalized benefits for your employees
● Always conduct exit interviews
Happy employees are worth the investment so take time to not only find the right people originally but make sure you do what you can to keep them!