Employee Turnover

Employee turnover, it is a challenge. Revolving workforces lead to increased training costs, inconsistent production, lost knowledge, poor morale, reduced or limited profits. Long-time employees have a deep history with your company, filled with important information that helps them do their jobs better. However, when these people resign, their knowledge, skills and abilities depart with them, as does the company’s investment to train the workers.

Costs of Employee Turnover

Employee turnover is costly. In fact, the cost of turnover for staff can be up to 50% of their annual salary ─ rising up to 150% of a senior executive’s salary.

The cost of turnover falls into two very different, yet equally impactful categories:

Hard Dollar Costs: These quantifiable expenses include costs such as separation, vacancy, recruitment, training and replacement. “At most organizations, they invest on average between four weeks and three months in the training of new employees,” Blythe says. She notes that the investment is lost if the employee leaves during the first year.

Soft Dollar Costs: While not precisely measurable, soft dollar costs can add up fast. This includes expenses such as the price your business pays for lower employee morale, lost business opportunities and decreased customer satisfaction.

The average annual turnover rate in 2015 for all industries nationwide was 16.7% according to CompData Surveys. As the labor market tightens and wage pressure increases, expect the uptrend to continue as companies fight for the best employees.

Find out how DealSafe can improve employee satisfaction and retain corporate knowledge reducing the risk and cost of employee turnover.

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