We all know that one of the main reasons organizations need to address turnover is that it is expensive. In fact, one source suggests that costs can range, on average, from $10,000 to $200,000 USD. When looking at total costs, many factors play into these estimates. Certainly, the level of the position matters. While a valuable employee, a janitor is a lot less expensive to replace that a CEO. Even at an average expenditure of $4,000 USD for a lower level employee, it is obvious that turnover can chew up your bottom line and spit it out.
Direct costs we associate with turnover are job postings, recruiting, drug testing, and background checks. Other costs that may not be as obvious are lost productivity, lost expertise, low morale, and poor customer service. These too are costly to both the bottom line, your brand, and may even lead to even higher turnover.
Many of us are all too familiar with the reasons people leave their current jobs and, of course, different sources have their own perspectives. For example, in doing the research for this article, a payroll management company suggests that the top reason people leave a job is due to low pay. However, the top reason cited by many sources that people leave a job is due to an incompetent manager. WARNING: Shameless plug ahead:
Therefore, is so important to invest in training first time managers. In addition, it’s essential to not only teach your more seasoned managers how to manage and coach, but to provide them coaching as well. Thank you for your indulgence and now back to our regularly scheduled article.
So how can we turn the tables on turnover. Here are some methods, in no particular order, that are simple to implement, cost effective, and will produce big payoffs for you, your management teams, and your organization.
- Fair and competitive pay. This means fair pay for the job and equal pay for equal work.
- Meaningful and challenging work.
- Many will tell you that even private acknowledgment for a job well done from a manager will buy you lots of stock in retention.
- Create a culture in which people can feel a sense of pride for being a part of and for their contributions.
- Life happens to all of us.
- Career growth and development
- Ethical leadership
- Hire for skill and fit. Hiring the right people to begin with will save you mounds of money and head off headaches.
No doubt, you can add more turnover terminators such as special perks. Lest we become too comfortable in our ability to predict turnover, its causes, costs, and cures, new research suggests that more innovative research and measurables may need to come into play. However, for now, a least, it would seem that the above list is fundamental and provides a solid core that never goes out of style like fashion or even tables.
Graphic Credit: BigStock.com Copyright: Dean Drobot
Anonymous. (n.d.). Top Ten Reasons Employees Stay with an Organization. CAI
Bisk, (n.d.). Impact of Employee Turnover and Solutions to Help. Executive Education University of Florida.com
Dempsey, J. (2017, February). 5 Reasons Your Employees Stay Put. ICMI.
Lee, T.W.; Hom P. W.; Eberly, M. B.; LI, J.; Mitchell, T. R. On the Next Decade of Research in Voluntary Employee Turnover. Academy Of Management Perspectives [serial online]. August 2017;31(3):201-221. Available from: Business Source Complete, Ipswich, MA. Accessed October 29, 2017.s://talentculture.com/5-reasons-your-employees-leave-and-1-big-reason-they-stay/
Winter, T. (2017, October). Top 5 Predictors of Employee Turnover. DTS International