How Much is Employee Turnover Costing You?

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Is Employee Turnover Costing You?

The average employee turnover rate in 2021 was 24%. 36% of this turnover was voluntary. Every industry sees a struggle to fill the roles they need to cover.

39% of HR leaders say it is more challenging to fill jobs than in pre-pandemic times. Even in filled rolls, 41% of those employees are currently looking for other positions.

This rise in turnover or Great Resignation, affects businesses across the globe. Data from the Bureau of Labor Statistics shows this will continue for at least the next 3 years.

So, what’s causing the Great Resignation? And more importantly, how do you combat the problem?

Factors Leading to the Great Resignation

The pandemic caused uncertainty. Now employees are looking for options that provide a little more stability. They are also looking for higher-paying jobs that offer better opportunities.

Another workforce shift also contributes to the turnover issue. Baby Boomers have hit the age of retirement and they are leaving the workforce in record numbers.

There are several factors that can lead to employee turnover. These factors are outside of these abnormal circumstances.

Lack of trust and/or respect

Lack of advancement opportunities
Lack of position understanding
Misrepresentation of the position
Poor work environment
Poor management

It’s important to listen to employees. You need to act on feedback to make sure your company is not falling into any of these problem areas.

The Real Cost of Employee Turnover

There are many estimates on the cost of employee turnover. On average, it costs anywhere from one-half to two times an employee’s annual salary to replace them. This cost includes

Screening and interviewing costs
Background check costs

Advertising costs
Costs to cover empty positions

There are also indirect costs that go into employee turnover. Lost employees means lost productivity. You lose productivity in the empty position and in other areas while you try to fill the open position.

This loss of productivity isn’t completely relieved even after hiring a new employee. During the transition period, it can take a new employee six months to two years to get to the desired level.

Turnover can also take a toll on employee morale. If you lose an employee valued by others or start losing several employees at once, it can cause concern. Trends like this can decrease productivity and lead to further turnover.

How to Reduce Turnover

Combating turnover starts with the beginning of the employee journey. During the recruitment process, honesty is necessary. Positions should have clear definitions and expectations that employees can understand.

This can start with a simple and thorough onboarding and orientation program. This includes training that helps new employees prepare for the new role.

Your orientation process should give the right first impression. It should also give a real understanding of the job.

It also helps to make sure you are offering the best perks for the type of employee you want to attract. This can include the usual perks such as healthcare, PTO, and retirement. It’s also good to consider other areas such as flexible schedules, hybrid, or remote work options.

Another benefit a lot of companies overlook is training and employee development programs. 80% of employees want access to training and employee development programs. What we see is 31% of employees receive no on-the-job training, and of those who do, 43% found it ineffective.

Training Focus Areas

The majority of employees say they would stay with a company if they received more training. How do you go about providing the training they desire? There are several focus areas that allow for frequent and consistent training.

Orientation Training

New hires worry about their ability to complete the job. Orientation training introduces employees to your company and to their new position.

Using microlearning strategies, you can increase their retention of the information they learn and build on the training to make it more impactful. Building on their skills as they go will help new employees feel more comfortable in their new position, making them more likely to stick around.

Ongoing Training

Ongoing training builds on your orientation training. Providing frequent, ongoing training that builds on itself will help employees feel secure in their positions.

Ongoing training is also useful to deal with any shifts in your industry. You have new technologies, new required skills, updated regulations, and any number of other changes that require regular training to keep employees prepared to complete their jobs and maintain productivity.

Re-Hire Training

Some industries have natural turnover. This means you are more likely to hire employees who have worked for you before. The most common occurrence is in seasonal work.

Ensuring these employees continue to receive training each year means you keep what’s important for their position top of mind. Things are easily forgotten over time and helping seasonal employees feel secure increases their rate of return.

Corrective Action Training

Even your best employees can have areas they need help with. Putting a plan in place for corrective action training helps make sure they get the support they need.

Corrective training allows you to deal with incidents immediately and provides support to ensure these incidents are reduced. A corrective training program also shows employees you are dedicated to helping them do their best, which shows that you care about them.

You also have the added benefit of corrective action training reducing the chance of serious incidents that lead to lost employees

Manager Training

Managerial training can start as soon as you determine an employee has the aptitude for a management position. Starting early helps them prepare for the transition and allows you to immerse them in what’s important to maintain a positive company culture.

It’s important to train managers in company culture and employee morale. Managers can make or break your company.

Employee Development

Employee development training isn’t just about management training. Anytime you find an employee with a strong potential for growth, or a need to grow certain skills, it’s in your best interest to give them the training and resources they need to meet those opportunities.

A great way to reduce employee turnover is to show employees you value them and want to provide opportunities for growth in your organization.

Meet Employee Needs Without Sacrificing Productivity

While training is essential for employee abilities and morale, many companies see it as costly and time-consuming. Training doesn’t have to be either of those things though.

With Infinit-I Workforce Solutions, you can provide regular training to meet your and your employee’s needs without sacrificing productivity. Our online training platform allows employees to access training when it’s convenient for them.

We also use microlearning strategies that break training down into short, manageable bursts of information for easier retention. We have the solutions you need to reduce employee turnover, increase productivity, and increase your company’s ROI.

To see how easy training can be for your company, schedule a free demo with one of our training experts.