Having to regularly replace lost employees is not just an inconvenience, but a huge business expense that can quickly add up.
Nowadays, the cost of replacing a single employee is equivalent to 6 to 9 months’ pay, or even more if they were in a senior role.
These additional expenses quickly eat into your business’s profits and can hinder long-term growth if the high turnover is not addressed.
The Real Costs of Employee Turnover
Since there is an average employee turnover rate of 15%, your business is likely to already be familiar with the impact it can have.
When an employee leaves the company, it can cause a lot of disruption to the rest of the team. Productivity is bound to take a hit since a full-time position has now been left empty, meaning other employees are having to fill in the gaps and take on the pressure of additional work.
This can quickly become stressful if the additional duties become an expectation on top of their existing duties, having a big impact on the momentum and making deadlines challenging to meet.
If the consequences of an employee’s departure begin to affect team morale, it can create a ripple effect. If people start to lose motivation and have to deal with an increased workload, it can lead to deeper issues, and possibly impact turnover further.
As well as the team being affected, employee turnover can also have a knock-on effect on brand image. Once clients have built relationships with certain employees and then things change, it can disrupt the flow.
If the empty role takes a while to fill or the replacement takes a while to adjust, the changeover period can be potentially harmful to your brand.
Protecting Your Business From a High Turnover
With the right steps, you can prevent your business from facing an unnecessarily high turnover. Let’s discuss some of the measures you can take.
Utilise your data
Although some resignations are inevitable, many are preventable.
Before an employee hands in their notice, there are often various signs of discontentment that are visible in the lead-up.
To spot these signs early on, you should be utilising the data that you have available. Metrics that show performance, engagement, and attendance are all key signs of an issue if they start to drop.
Using an integrated HR system, such as PeopleHR Evo, means you can set up dashboards to track key metrics. This will highlight any trends early on, and you can use this data to open up conversations with employees who are showing signs of unhappiness at work.
If an employee needs a lighter workload, more help from their boss, or is dealing with personal problems, talking to them about it and coming up with solutions will make them feel heard and increase the likelihood of retention.
Improve your onboarding process
First impressions count, and when a new employee joins your team, the onboarding process they experience will shape their initial opinion of their new job.
Over half of employees say they are dissatisfied with their onboarding experience, with the main reasons including a lack of structure, the job not aligning with their expectations, and uncertainty about what is expected of them.
The first few days are very important for setting the tone for a new employee’s relationship with your business. If they have a bad onboarding experience, it can affect their productivity and engagement right away.
Your onboarding process should be standardised to ensure everyone gets the induction they deserve. This needs to include introductions to the team, clear expectations, necessary training, and an immediate contact that they can go to with any questions or concerns.
Offer growth opportunities
Everyone has their own personal career goals, and if they are unable to work towards them in their role, they are more likely to look elsewhere for new opportunities.
Your business has a duty of care for the well-being and happiness of your employees, and if people don’t feel valued at work, it’s going to reflect in your turnover.
Even if there are no role promotions available, there is always a way to find upskilling and growth opportunities. Offering training to help employees grow in their careers and contribute more to their team will help maintain motivation and momentum.
It is worth having a system in place that records the goals set during appraisal meetings and notifies you when they have been met.
Being able to celebrate achievements, however big or small they may seem, creates a strong team dynamic and encourages people to strive for better.
This approach also helps build a good understanding of each employee’s skills, identifying potential internal promotion opportunities before looking externally during the recruitment process.
Building a Long-Term Workforce
With the cost of hiring new employees continually increasing, employers are realising the importance of improving their company culture and doing what is needed to maintain a happy workforce.
Employee turnover can have a big impact on the performance of a business. As well as creating extra stress and disruption for employees, it can be a big financial burden for the company.
By retaining existing employees instead of having to find new ones, not only will it save money, but it will also help create a strong workforce that can help drive business growth.
Author: Heather Langley – Content Writer & Outreach Specialist, Solvid
Photo credit: StockCake
