The Cost Of Employee Turnover (Free Calculator)
The cost of turnover is more than the amount of replacing the lost working body. Employee turnover includes monetary and non-monetary costs, such as lost productivity and time. The high cost of turnover can be prevented by keeping eyes on employee trends and frequent signs of turnover before they negatively impact the workplace.
Use our free calculator below to find the cost of your employee turnover rate today.
What Is Employee Turnover Really Costing You?
Are you wondering whether or not hiring that employee worth it? Well, It was if you understand where you may have gone wrong and put the right plan in place in order to grow from the experience.
When you decide to be in an intimate relationship, odds are you don’t view it as a transaction but in reality, it is slightly because what’s on the line is the most precious commodity of all… time. As soon as things start to go south (as in not well…) you most likely begin to think of all the time invested in the relationship and whether or not it was worth it. When you become aware of your mistakes, learn from them, and ultimately correct them, you improve.
Employee turnover is defined as the act of replacing an employee with a new employee and is often represented as a negative aspect in the business world. This makes turnover data very unappealing but if not handled correctly, turnover can be a significant blocker of success.
The cost of turnover is more than just replacing a body. Employee turnover includes monetary and non-monetary costs, such as lost productivity, time, and role expertise. The high cost of turnover can be prevented by understanding employee trends and spotting signs before they negatively impact the workplace and the organization overall.
Controlling The Cost
The most important piece of the turnover cost puzzle is your ability to gather appropriate data. For many employees that are on their way out, disengagement is one of the top reasons they end up making the decision to finally leave. Disengagement costs the global economy $7 trillion in lost productivity, but when an organization utilizes exit interviews, they receive valuable comments and information that help explain the sources of turnover. Whether it is the disengaged employee or a retiree, exit interviews are invaluable in understanding why turnover occurs. By gathering exit data, organizations can see turnover trends and implement actions to prevent them. Having a better understanding of your workforce will help guide you in making the necessary changes needed to boost employee engagement and productivity.
After gathering the initial data, creating an action plan to prevent turnover seems like a rational next step. However, the time it takes in order to gather historical data varies. Implementing action plans to increase employee retention before understanding the data can do more harm than good for organizations. Instead, break the data down into categories and take notes each quarter. By noting turnover trends as they occur on a quarterly basis, companies will soon have enough data to produce sturdy and effective action plans. Communicating with HR and department heads as the data begins to come in facilitates a smooth transition from the initial loss of talent to the establishment of the action plan.
Replacing Lost Talent
Creating an action plan may reduce future turnover costs, but another aspect to turnover is the fact that you still need to replace the lost talent. The hiring process takes a significant amount of time, which means money spent. Long interview processes are costly; there is lost productivity for employers and foregone salaries for workers. On the other hand, carefully screening each potential candidate may result in better new hires. Every organization must evaluate their needs to determine the proper amount of overall time to allocate to the interview process.
Once a candidate is chosen to replace the lost talent, the next step for employers is to utilize their exit data and follow their action plan in order to ensure that their new-hire does not become another turnover statistic.
Fighting The Good Fight
The lost cost of time, productivity and effort allocated towards replacing lost talent can get discouraging. Nevertheless, the light at the end of the tunnel is that turnover costs can be reduced by taking the right steps at the right time. Organizations must recognize that improving employee retention is not as complicated as it may seem at first as long as the data is gathered properly, an effective action plan is established, and the right new talent is obtained to create success and reduce turnover.
If you’re ready to start collecting your journey the right way and would like to know how to properly execute exit interviews, then check out our Ultimate Exit Interview Guide and close the gap even further on increasing your employee retention.
Not Sure How Many Employees Were Lost Last Year?
Your employee turnover rate is a foundational statistic for understanding your organization’s overall health. Use our free calculator to determine how many employees were lost.