Several months ago I received a phone call from a potential client who had $1 million USD in employee turnover last year – a staggering loss. He asked me why I think this is happening and I replied, “Without knowing any details, there’s a good chance it’s related to your culture.” And do you know what? It was. Although many organizations are experiencing strong revenue growth, thanks to a strong economy, they are suffering because employees are leaving in droves.
Why are employees fleeing like never before? By the year 2020, 50 percent of the workforce will be made up of Millennials, and this generation is not willing to work in a crappy dysfunctional culture. It’s that simple.
To calculate your turnover, add up the number of employees who left in 2018 and divide it by the total number of employees at the beginning of 2018. That’s your employee turnover percentage. The average turnover among employees in all industries is 18 percent, so you can see how your organization stacks up.
Employee turnover cost is the cost to hire a replacement employee and train that replacement. This may seem like it would not cost a lot of money, but replacing a professional employee costs 75-125 percent of the employee’s annual salary, as you will incur:
- Lost productivity costs
- Recruiting costs
- Interview costs
- Post interview costs
- Hiring costs
- Onboarding costs
- Training costs
In addition, you will have the cost of reduced employee engagement from other workers, who have to cover the workload of the employee who left and who view the resignation as a sign that your organization isn’t the wonderful place that you are making it out be.
WHAT CAN I DO?
Calculate your turnover rate and your employee engagement score (via a survey). If your organization is falling short, commit to making improvements by developing a strategy to create an amazing culture. Why? In general, people don’t leave wonderful workplaces that are meeting their needs. In addition to minimizing turnover, an extraordinary culture will boost productivity, customer satisfaction, and revenue growth. Don’t know where to begin? Contact me for a complimentary discovery session and let’s talk about the possibilities.
Jill Christensen is an employee engagement expert, best-selling author, and international keynote speaker. She is a Top 100 Global Employee Engagement Influencer, authored the best-selling book, If Not You, Who?, and works with the best and brightest global leaders to improve productivity and retention, customer satisfaction, and revenue growth. Jill can be reached at +1.303.999.9224 or email@example.com.