When making any type of business decision, arguably the most important question is: “How much is it going to cost?” While understanding the cost of marketing, new products, payroll, and new technology is important, how aware is your management team regarding the cost of employee turnover?
The Cost of Employee Turnover
Employee turnover can cost up to 150% of a mid-level employee’s salary just to replace them. What about the cost of replacing a C-level employee? Try 400% of their salary! With 2.5 million people quitting their jobs every month in the U.S., it may seem like a daunting and nearly impossible task to keep your employees. Instead of planning around a high turnover culture, try implementing a few small strategies to keep employees happy, engaged, and in it for the long haul.
In a previous post, we talked about why we should care about Millennials.
Would you like to know what they’re costing you?
It has been reported that it can cost up to $25,000 dollars to replace a Millennial employee with the added time and resources that go into recruiting, training and onboarding new employees. With 52% of turnover occurring among first year employees, turnover costs can quickly add up, especially for your younger employees.
Why is Employee Turnover More of An Issue Today?
It seems as if turnover has been an issue that’s been talked about more lately. But why are people changing jobs so much? It has been reported that 1 in 5 employees will quit their job in 2016. That’s 20% of the workforce looking to ditch their current job and look for something that better suits their wants and needs. In a recent survey, over 50% of employees expressed they were unhappy with the communication within their organization. Proper training, recognition, and clear opportunities for promotion are also very important factors to consider when looking at reducing turnover.
Management should also be aware of the messages they’re sending employees. No one wants to waste their time and energy on something they feel lacks purpose or importance. An astounding 68% of employees reported dissatisfaction with the sense of purpose organizations are or are not communicating to their employees.
While there were certainly employees in the past who were unhappy with their jobs, why are we now experiencing such high rates of turnover?
Think about it: we live in a world where every bit of information is just a Google search away. If I don’t like my job, I can find thousands of others posted from Boston to Seattle. Within minutes I can find just about whatever I want about a company including their reviews on Glassdoor and what they’re paying their employees. Needless to say, it’s a competitive world out there, and, with an abundance of choices, employees have a multitude of options. They have the opportunity to leave if they’re unhappy and find something else relatively quickly simply because there is more information available out there than ever before. With the ability to be able to pick and choose what they want in a job and an employer, employees feel less inclined to simply “stick it out” in their current position.
So now that you’re worried about your whole staff up and leaving you, keep an eye out for our next post (or subscribe to our blog!) which will discuss how you can combat employee turnover and retain your valued employees.