Employee turnover is more than just an irritation. It has real fiscal consequences for your company, and can drain away resources that put you in a compromised position strategically. If you don’t make stemming rates of turnover an urgent and ongoing priority, it will directly impact the long-term health of your company. To illustrate that fact, we’ve taken the opportunity to explain exactly how turnover costs your company.
Lost Productivity
Any time an employee quits or gets fired, it creates a gaping hole in your workforce. That can cost you in one of two ways. Either the work the departed employee was responsible for is not getting done, which represents a huge drain on productivity, or the slack is being picked up by co-workers to the detriment of their own work. Either way, you’re not as productive as you used to be. And if your remaining staff is overworked for too long, it can drain morale and directly contribute to more turnover.
Missing Knowledge
Just because someone else has credentials similar to the person you’re trying to replace doesn’t mean they can or will do the job in the same way. Over time, the person you’re now missing developed contacts, made connections, streamlined work flows, and picked up irreplaceable experiences. Simply put, they found the best possible way to get their job done, and when they walked out the door, that expertise walked out with them. Even when you do find someone to fill the role you shouldn’t expect them to perform it as well any time soon.
Wasted Training Costs
This is one area where you can actually measure the cost of turnover empirically. You likely spent a tidy sum training the person that left your organization. And even if you did not spend any money specifically on training, you dedicated valuable resources to the process. For instance, whoever was responsible for training the rookie employee was kept from doing their own job. You paid them, but because they were showing someone else the ropes, they couldn’t get any work done.
Wasted Recruiting Costs
Recruiting is a time- and labor-intensive process that frequently involves attendant costs. You may have paid for someone to fly in for an interview, money that now proves to have been misspent. And even if time and labor was all your recruiting process cost, it still impacted your company. The HR staff involved had to work on recruiting, instead of taking on other tasks.
The good news is that the cost of reducing turnover is often far less than the cost of losing employees. Make a modest investment in doing things differently and it will pay dividends long down the road. Learn more about enhancing employee engagement and loyalty by working with the engineering recruiting experts at Selectek.
