It’s crucial to hire the most talented employees available when you’re building your team. In the long run, however, retaining those employees will build long-term benefits for your business. You need to find people who fit into your company’s culture and bring the right skills and mindset to your team.
If you can’t retain your employees and you keep losing them to your competition, finding and hiring those replacement can cost your company a lot of money. Here’s how much turnover is costing your company.
Turnover Costs Morale
When someone leaves your company by choice, everyone else pauses to ask why and to find out what happened. They start to think about whether they’re happy or what they would do in a similar situation. This can result in a loss of engagement or productivity or it might actually cause a domino effect of departures.
Unhappiness can become contagious, so you have to be proactive and squash discontentment and make sure your employees are happy. If the position sits empty for too long, your other employees will probably have to step up to cover those duties. This will start to weigh on them and you risk further unhappiness.
Turnover Costs Money
Some studies suggest that each time a company has to replace an employee, it can cost an average of anywhere from six to nine months’ salary. For someone in a leadership position, it might be as much as double the annual salary.
There are many costs that add up and they’re different for every company. There are costs related to job advertising and screening before training the new hire. A company is likely to spend 10 to 20 percent of an employee’s annual salary in training over two to three years.
Turnover Costs Time
It takes employers a lot of time to advertise, interview, screen and hire for a vacant position. Some companies like to do several rounds of interviews to be sure about a candidate. All that time adds up, and during that whole process the position probably sits empty. That means your team’s time is not being utilized in the best way possible as employees cover additional duties.
Keep Your Best Employees
Do your best to retain your employees so you’re not faced with these costs again and again. Start by conducting exit interviews so you can figure out why people are leaving, then respond to those trends. If departing employees are repeatedly complaining about a lack of benefits, an inflexible schedule or low pay, you know what you need to fix. Make sure your benefits package is solid and can compete with other companies in your industry.
Finally, create an environment where you can regularly check in with employees and hear feedback from them. When you start to sense dissatisfaction, find out why and do something about it.
If you’re looking for a trusted staffing partner in Idaho and Utah, talk to the team at Extreme Staffing and Payroll today.