Employee turnover is an expense for any business. It pays to improve employee retention and reduce employee turnover. Here are three reasons:
- You get benefits from experienced, trained, and seasoned employees: yesterday’s posting.
- You spend lots of money replacing employees you do not retain: this posting.
- You can apply Employee Engagement as a “retention tool” and gain numerous other benefits as well: tomorrow’s posting.
Today let’s look at the downside of employee turnover! (Yesterday we looked at the upside of employee retention.)
In simple dollar-terms, employee turnover is expensive to business. Various sources suggest these are average employee-replacement costs:
- Pizza delivery: $3,500
- Supermarket cashier: $3,600
- Hotel employee: $4,100
- Call center associate: $8,000
- Management/sales: $24,000
- Protective services (police/fire): $25,000.
Here’s what you have to spend money on just to hire the replacement (direct costs):
- Advertising
- Sign-on bonuses
- Relocation pay
- Travel expenses
- Headhunter/recruiting fees
- Assessments
- Screening services
And here are indirect costs of bringing a new hire up to speed:
- Training
- Service disruption
- Loss of morale
- Burnout/absenteeism
- Loss of experience (corporate memory)
Now all of this doesn’t mean you should keep the employee who’s not performing as he should, who’s not generating quality product/service, who’s not producing satisfied customers.
It does mean you should look for ways to reduce the above costs by retaining employees who are performing at and above your standards.
Time and energy and effort devoted to employee retention reduce costs. And they generate business benefits.
Drop in tomorrow. We’ll explore specific, proven ways your Employee Engagement efforts serve to reduce those costs and generate those benefits by promoting greater employee retention.
Keep in mind that Employee Engagement works better, lasts longer as an element of your business culture.
Tags: Communication, employee, Employee Engagement, Employee Recruiting
