Financial Factors and Beyond
Replacing employees is expensive. Forbes reported the replacement cost of millennial employees as $15,000 to $25,000. However, the average cost of employee turnover is not felt like other costs. No one sends your company a bill for $20,000 when an employee terminates. This cost accrues through recruitment, training, and lost productivity. There are additional factors beyond the financial that make up the average cost of employee turnover which we will discuss today.
Most organizations report that retaining young talented employees is difficult. As career paths evolve to include shorter segments with more companies, employers are struggling to cope with the average cost of employee turnover. Each time an employee leaves, the company loses not only productivity but training and experience invested in that employee. The company must invest resources in finding, recruiting, and training a new person. All this adds up to a steep financial toll as part of the average cost of employee turnover.
Looking Beyond Financial Factors
There are also factors beyond financial impact that hit when employees leave. Terminations have a negative impact on employee morale. Relationships among colleagues are the glue that holds teams together. When someone leaves, the connections among colleagues is disrupted and the risk of further turnover increases. Essentially, turnover begets more turnover. This impact is difficult to measure and is not included in the typical figures representing the average cost of employee turnover. But it matters – a lot.
Terminations have both financial and nonfinancial impact on the average cost of employee turnover. Costs include recruitment, onboarding, training, and softer elements such as employee morale and further turnover. There are many ways to tackle these costs, and it starts with company culture. Once you identify the causes of employee turnover, take action to reduce it. Make sure your employees benefit from being at your company in unique ways. One of the best unique ways to inspire your workforce is through group events. Involve allows you to communicate with your employees and keep them up to date with not just general announcements, but also various fun workplace events. Keep your employees happy to keep them at your company.
If you are ready to tackle the causes of employee turnover and build your workplace culture, take a moment to check out Involve’s Customer Success Page.
-  Taylor, Kate. "Why Millennials Are Ending The 9 To 5." Forbes, 23 Aug. 2013. Web.