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Employee Turnover is a Costly Challenge
By Laura Sims | March 12, 2008
Turnover of employees is costly in both time and money. Research shows that it typically costs 30% of an employee’s first year’s salary and 67 days to replace a bad hire. For one employee making $30,000, you will spend about $9,000 and more than two months to hire a replacement.
Turnover can also lead to customer service issues - which may affect future profits. Consistent turnover also affects morale in an organization. If turnover is in operations, now we have quality issues.
What can you do to reduce turnover?
- Set Clear Vision, Goals and Objectives: Clear goals for the company and how each employee fits into that vision allow employees to understand where the organization is going and what part they play. Don’t assume they know.
- Communicate: Ask for your employee’s input. Job satisfaction increases when people feel that their opinion is listened to and appreciated.
- Training: Research shows that for employees who say their company offers poor or no training, 41% plan to leave within a year. Of those that say their company offers excellent training, only 12% say they plan to leave
- Benchmark: Set expectations for each job that are measurable and attainable. If you don’t have data internally, there are outside sources. Look at the motivations for a particular job that achieves success. Hire when there are matching motivations.
Employee turnover is a challenge you can’t afford to ignore. Use the tools available to get the right people in the job and keep them there.
Laura Sims is a BAI AdviCoach® based in Richmond, Virginia.
Topics: Human Capital |