When it comes to costs, many organizations “cross their T’s” and “dot their I’s” – that is, unless you are talking about the costs of turnover.
What are the real costs of employee turnover? What does it cost businesses to replace key personnel when they jump ship to change careers? Well, it depends on whom you ask. The calculations vary significantly from study to study and organization to organization yet all are equally frightening!
The Society for Human Resource Management estimates that one $8.00 per hour employee costs an organization $3,500 in additional expenses when things like recruitment, lost productivity, and training and development are all taken into consideration.
Unfortunately, many businesses today don’t take the time to implement a solution. Instead, many companies spend the bulk of their energy and resources finding ways to decrease payroll and increase sales. It’s practically an oxymoron. The ironic thing is studies have shown a 10% reduction in employee turnover is worth more than a 10% increase in productivity, or a 10% increase in sales.
The question you should be asking is this: which will you choose to focus on in the coming months and years ahead, because, according to a recent article in Forbes, employee turnover is the highest it has been in ten years.
“When you tap into the human element of your people, higher engagement and productivity become the natural byproducts.” – Jeff Boss
How has turnover impacted your organization? Have you put specific plans in place to reduce it, if necessary? Please comment below. I look forward to reading your leadership insights and interacting with you!
Nathan R Mitchell is America’s Leading Empowerment Coach. In 2010, in an effort to fulfill his purpose of empowering leaders to reach their potential, he founded the leadership development company, Clutch Consulting. Nathan is also a Certified Speaker, Trainer, and Coach with The John Maxwell Team. Originally from Springfield Missouri, he earned his B.S. Degree in Management and an MBA from Missouri State University. He lives near Tulsa Oklahoma with his wife and children.