Most companies recognize that turnover is harmful to the organization. However, not all of them understand the full cost of high employee turnover, causing them not to make managing it a priority. Unfortunately, when that occurs, the situation usually only gets worse.
Once you what high employee turnover is costing your company, the idea of ignoring the issue will seem ludicrous. To help you get a grip on the situation here’s a look at the damage poor retention can cause and what you can do to fix the problem.
The Cost of High Employee Turnover
When most managers think about cost, they focus on the financial. However, when it comes to turnover, there is certainly a monetary aspect to the situation. At a minimum, you usually have to shoulder expenses related to advertising the vacancy and recognize the sunk cost of onboarding the unsuccessful hire.
However, the cost of high employee turnover goes much further than that. There is also the time and energy involved in finding a replacement. Hiring managers will have to sort through another batch of resumes, conducting more interviews, and handle screening tasks. That all takes time that could otherwise be spent on profit-driving tasks, harming the bottom line.
Additionally, poor retention is also incredibly harmful to your broader operation. When there’s a vacancy, productivity is going to be lower. If the issue is systemic and ongoing, morale among your employees will also decline, leading to poorer performances. This costs your company in lost output or the need to repeat work that wasn’t done to the proper standard initially, further hurting profitability.
Finally, high turnover also does harm to your brand. This makes finding skilled candidates more difficult, increasing the odds that you’ll need to extend the recruitment process or settle for a job seeker that isn’t the best fit.
In the end, the cost of poor retention is incredibly high. That’s why addressing the situation is so vital.
What Companies Can Do to Improve Retention
If you want to improve retention, you need to identify the root cause of the problem. In many cases, your culture at least plays a role. For example, if employees feel overworked, unsupported, or undervalued, they won’t stay for long. Until that is fixed, turnover will likely remain high.
Insufficient compensation can also be a factor. If you aren’t paying a competitive wage and offering the right benefits, employees will usually leave for a better opportunity as soon as one comes along. In this case, simply correcting your compensation can be enough to improve retention.
At times, it’s your hiring approach that’s leading to a turnover problem. If you select job seekers who don’t have the right skills or capabilities, which may be particularly common if you aren’t offering competitive wages, they won’t thrive in the position. The longer they struggle, the higher the likelihood that they’ll either leave or need to be terminated.
With this last issue, partnering with a recruitment agency can be the answer. Not only can they help you identify key skills for each role, but they can also offer an exceptional candidate experience to job seekers. Plus, staffing firms typically have pre-existing talent pools brimming with top-tier professionals, making it easier to find right-fit candidates quickly.
If you’re struggling with high employee turnover, the team at The Advance Group can help. Contact us today.