How high turnover is costing your business and what you can do to address it

Employee turnover is a problem that every business faces, but at a high cost. Not only does replacing an employee cost your company money, but it also brings down productivity, and can upset the office environment. In competitive industries where recruiting and retaining talent takes more than a high salary, using benefits such as travel, can encourage workers to stick around and increase their company loyalty.
How bad is it?
Employee turnover and the associated costs affect every industry from retail to healthcare and beyond. In North America in 2017, 20% of employees said they planned on leaving their jobs. By the end of the year, 26% of all employees had quit their jobs.1 There are many things that could be driving employees away from your business, but the numbers are clear– workers are leaving their jobs more and more often in search of better opportunities.
What does it cost?
Employee turnover can cost companies millions of dollars annually. For employees in entry or mid-level positions, the median cost of turnover was 21% of that employee’s salary. When you climb the ladder to C-level executives, medical professionals, and other jobs requiring highly specialized skills, the costs of turnover can exceed twice the annual salary for proper recruitment and onboarding.2 But these aren’t the only costs to your company.

The costs in time, lost work, training, and office morale can severely impact your business. While the position is vacant, the excess work must be spread to other workers, creating work overload and loss of productivity. This also impacts your office environment and can affect the emotions of staff and their views of the company. As more and more workers become disengaged, burnout can spread and retention will decline further. After a position is filled, other employees must take time from their schedules for training, putting work further behind. Loss of work, time, and productivity directly affect your bottom line and should be considered when calculating the cost of turnover in your business.
Why do employees leave?
Individuals don’t just decide to leave jobs on a whim; there is always a root cause leading to their dissatisfaction. Commonly cited reasons for leaving jobs include: poor compensation, inefficient managers, too much overtime, lack of recognition, unfair workload, limited career path, burnout, lack of benefits, a poor work/life balance, a disconnect between company values and their own… the list goes on. Perhaps they were lured away by another company who offered a more competitive salary or better benefits. There are hundreds of reasons an employee might leave a company, but if you aren’t doing anything about it, it’s costing your company major money.
What can I do about it?
In order to solve problems with employee retention, you need to understand what is making people unhappy. Check in with your employees, ask them about their lives, and be open about your desire to do what is necessary to keep them around. Their mental and physical health are vital to their continued productivity. Be on the lookout for signs of burnout such as mental exhaustion, decreased accuracy, or disassociation. Increase your employee engagement by investing in staff development and showing support for their career aspirations.

Offering new benefits, like Taab, can also show employees that you support their dreams. Travel is a great tool for combating burnout, increasing productivity, and creating more well-rounded employees. If you’re serious about making a change for the benefit of your workers, be sure they have a say in the changes you make.

Turnover is an unavoidable part of business, but you can do something to increase employee retention and grow your company to new heights. Considering the majority of Millennials would rather have more time off than a raise, it’s no surprise that companies are finding innovative solutions to recruit top talent and keep their current employees around.