Obstructions in Reducing Turnover
You’ve heard the positives and the negatives of turnover rates. You’ve probably even been curious on how it can affect your business. Most of the time businesses don’t speak about the true costs of employee turnover. In fact, the cost is largely hidden. The expenses don’t show in your loss and profit statements, and they are virtually hidden when it comes to company budgets. So how is this mysterious entity actually causing you harm?
Costs of Employee Turnover
We often hear about how employee turnover can greatly cost a business a lot of money. But, how much money? Imagine if an average employee’s salary is approximately $50,000 annually. Generally, the costs of employee turnover can be as high as 150% of the employee’s salary. So, this means that losing an employee will cost a business $75,000. Lets not forget the additional costs it will take to hire and train a new employee. On the same token, while a business may suffer financially, it may also experience a loss in productivity.
What you lose with employee Turnover
Besides the loss of monetary value an employee brings, employee turnover also makes it possible for you to lose productivity in your workplace. When an employee leaves, they leave with knowledge and work expertise. For the time when an employee is trying to be replaced, there is a gap of productivity loss. Sure the most important tasks will be finished, but all minor tasks will fade away. Because an employee has left, others will now have to temporarily work harder to accomplish various responsibilities. This can cause a disturbance in the momentum your currently employees have. Now that they have to work harder, they will demand more in return, and their quality of work may decrease.
How to prevent employee turnover
We’ve talked a lot about how to prevent employee turnover in our other blogs, but I now want to explain the importance of an positive environment. Company culture is by far the most important thing when it comes to retaining employees. This is from experience, so take my word for it. Employees love to feel valued, period. It’s essential to create a system that allows for the right people to stay in a business, and for the “bad” ones to leave. Let your employees work in a flexible environment. Allow for a system that relies heavily on results, not hours spent behind a desk. At the same time, provide the tools for success in getting tasks done efficiently. Give your employees an avenue for professional growth. Make sure that your business is growing with your employees.
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