How often do you experience employee turnover?
If you’re seeking creative solutions to minimize or eliminate employee turnover, you may be concerned about how this can potentially impact your business. You may also be curious as to why some employees leave their positions while others choose to remain.
Identifying the Costs of Employee Turnover
In addition to affecting workplace efficiency and effectiveness, there are also financial costs to employee turnover. A recent survey showed that some organizations are unaware of these direct and indirect costs. It was found that just 17% of the companies surveyed were aware of the direct costs, while 9% were aware of the indirect costs.
Slightly over half of these turnovers occur within an employee’s first year. Hourly employees tend to leave more often than salaried employees, however. On average, they will remain in a position for just 4 months, which is 4 times longer than salaried personnel.
If you are paying an employee $8.00 an hour, for example, the average cost to replace them would be around $3,500. With a mid-level employee, however, it may cost you up to 150% of their yearly salary. For high-level employees, this could be 400% of their yearly salary or more.
Signs an Employee Might Be Quitting
In some cases, you may be able to identify the employees that are most likely to leave. Perhaps they appear unhappy, unmotivated, or uninterested in the position. Or their skill sets, which you believed to be a good match, fall short.
Other employees may surprise you with that 2-week (or less) notice on your desk or in your email. They appeared perfect for the position, showed up motivated, were a team player, and all those other desirable attributes. It just doesn’t make sense.
Or does it?
While there are a variety of reasons why employees quit, there are several common ones. Consider these results from a recent survey:
- Lack of professional development opportunities: 30%
- Inadequate compensation: 28%
- Boredom, or not feeling sufficiently challenged: 27%
- Inadequate work/life balance: 20%
If you’re looking for warning signs that one or more employees may be preparing to quit, absenteeism is a common sign. When workplace stress, anxiety, and conflict are part of an employee’s day-to-day experience, this can create an avalanche of issues.
Workplace stress can make a major impact on whether or not your employees need to take a “mental health day.” The result? They tend to take around 21 days off from work on an annual basis. A recent survey showed that 2/3 of men and women claim work adds to their stress, which results in their calling in sick. On an annual basis, around 1 million employees in the United States are absent for this reason alone.
Furthermore, your manager may also be spending 25% to 40% of his or her work day dealing with conflicts. These might include handling workplace absenteeism and personal employee conflicts as well as ensuring that the business is running as it should.
If you’ve noticed a high turnover rate with Millennials, for example, here’s why: They’re ambitious! In addition to comprising 91% of the current workforce, they tend to seek new positions in just over 2 years, as opposed to the 4.4 years for employees of other ages.
Creative Solutions to Decrease Turnover and Increase Success
Were you aware that one of the major influences on workplace success is a strong, positive company culture? Employees are more likely to remain in their positions when they feel motivated, which as you are well-aware, increases productivity. Companies with a positive work culture and environment have 65% less voluntary turnover rates than others.
In general, CEOs do want leadership advice; however, a recent survey showed that approximately 2/3 of these individuals are not receiving it. If they were to receive executive coaching, your company would experience a significant return on the investment.
When you invest in business coaching, this relationship will usually extend for 6 to 9 months. In addition to receiving expert guidance on strategic planning, a business coach can assist you with arriving at workable solutions to address employee conflict resolution, turnover, and absenteeism. Furthermore, they will hold you accountable to attaining your business goals.