Top 5 employee turnover statistics. The hidden costs of employee turnover.
Employee turnover can have a significant impact on the health and success of any business. Not only does it affect morale and disrupt operations, but it also costs companies an enormous amount of money.
But what exactly are these hidden costs? Let’s take a look at the hard and soft costs associated with employee turnover and how you can reduce them.
The Hard Cost of Employee Turnover
The hard cost of employee turnover is quantifiable, meaning that it can be tracked and measured in terms of dollars and cents. This includes things like
- recruitment costs,
- training costs,
- severance packages, and advertising expenses associated with hiring a new person to replace the one who left
- lost productivity while the new hire is getting up to speed,
- increased workload that other employees may have to take on to make up for the absence of the former employee.
The Soft Cost of Employee Turnover
The soft cost of employee turnover is not so easily measurable, but that doesn’t mean it isn’t just as important—if not more so—than its hard cost counterpart. This includes things like
- decreased morale due to increased stress levels from taking on additional work or having to train new hires,
- decreased customer satisfaction due to inexperienced workers or lack of continuity in service delivery,
- loss of institutional knowledge accumulated by long-time employees, and lower motivation among remaining staff members due to lack of recognition for their efforts.
Top 5 employee turnover statistics in numbers:
- Bad hire costs companies an average of 30 % of that person’s annual salary.
- Some 66% of workers have accepted a job and realized it was a bad fit. Half of those people quit in six months or less.
- The future of work is flexible. People asked the main reasons why they are considering switching jobs, 28% of employees mentioned work flexibility.
- 77% of workers have experienced burnout from excessive work hours at their current job and 42% quit their job for this reason (Deloitte)
- The cost of replacing an individual employee can range from one-half to two times the employee’s salary. That means losing an employee with an annual salary of 120,000 PLN can cost the organization as much as 240,000 PLN
Reducing turnover in an organization involves creating a positive work environment, fostering employee engagement, and implementing effective retention strategies. Here are some strategies to help you avoid turnover:
- Hire the right people
- Provide competitive compensation and benefits
- Offer opportunities for growth and development
- Foster a positive work environment
- Improve management and leadership
- Conduct stay interviews
- Build a strong company culture
- Recognize and reward employees
- Regularly assess and improve retention strategies