High employee turnover hurts the business bottom line. It’s estimated that the average cost of a lost employee is 38 percent of the employee’s annual salary. Considering the average income in the U.S. is $50,000 a year, that’s a $19,000 per person. When employees leave, the ripple effect can be felt throughout the company. Lost knowledge, training costs, interviewing costs, and recruitment costs all add up, and companies cannot afford to ignore the long term implications high employee turnover has on the success of the business. As soon as an organization takes the time to consider high churn rates, it starts to focus its narrative on compensation, benefits, training, development, engagement, and morale boosting activities. This leads to a highly motivated and engaged workforce.
Today, it’s uncommon for an employee to remain at a company for more than 5 years. In a survey by the Bureau of Labor Statistics it found that the average time an employee spent at a company in 2014 was three times higher (10 years versus 3 years) amongst employees between the ages of 55 and 64, than those between the ages of 25 to 34. Companies cannot prevent their employees leaving for the ubiquitous greener pastures; however, there are means and ways of preventing the inevitable. Factors such as lack of training, ineffective leadership, and employee communication can all pave the way to the exit door. Companies need to shift their focus to their employees in order to be successful in the long run.
1. Lack of training
Employee retention strategies begin right from when the new employee steps through the door. On boarding is an important process as it ensures employees have the necessary knowledge, skills and behaviours needed to become successful in the long term. By introducing them to the mission and the values of the company, new arrivals can adopt company wide practices quicker. When a company implements a successful on boarding program, they experience 54 percent greater productivity and 50 percent greater retention.