3 Ways to Avoid the High Cost of Employee Turnover
Employee “churn,” or turnover, is the costly asset loss every organization faces when an employee resigns, retires, or gets fired. Josh Bersin of Deloitte reports that voluntary turnover alone, at an average rate of 13%, costs many organizations millions of dollars each year in new employee recruitment, interim reduction of labor costs of the exiting employee, and the cost of lost productivity:
“If an organization has 30,000 employees and an average voluntary turnover rate of 13 percent, the potential cost to the organization is a staggering $427.7 million in one year. If this illustrative organization can decrease its voluntary turnover by just 1 percent, it can save $32.9 million in one year.”
Employee Retention: Mitigating the Cost of Employee Turnover
1) Be the Office “Meteorologist” of Your Organization
In a previous Big Think article, we discussed the importance of employers remaining aware of the emotional climate of their employees. This entails testing the “temperature” of the office environment to gather the data or information leaders need to make actionable decisions. This process can be accomplished in several ways:
- One-on-one or roundtable discussions,
- Short weekly anonymous surveys or questionnaires, and/or
- Exit interviews of employees who decide to leave.
Using this process can help you to identify issues that affect the happiness and productivity of your employees and lead to employee turnover. Not only can this initiative contribute to staving off storms that result in decreased productivity, but it also can help to avoid the maelstrom of employee churn and the high costs of replacing them.
2) Help Employees Feel Like They Matter and Have Purpose
Employees are not automatons; they are living, breathing people with feelings, responsibilities, families, and interests outside the office. In addition to the financial need of providing for their families, employees also need to feel like they are a part of something significant.
Creating a sense of purpose in the workplace is a great way to connect meaning and a sense of accomplishment to what they do. It also can:
- Create opportunities for employees to learn and grow,
- Increase employee engagement through collaborative leadership, and
- Create opportunities for employees to collaborate and learn from one another.
3) Invest in Employees by Developing a Culture of Learning
Developing an effective learning culture within your organization is essential to attracting and retaining the best and brightest talent. You can minimize employee churn by nurturing a culture of learning that welcomes differing opinions as well as fosters collaboration and innovation. This means making training available to all employees and not a select few.
Many good leaders start out mediocre and develop the skills they need over time through training, according to Sir Andrew Likierman, a Big Think expert who serves as Dean of the London Business School:
“What leadership skills training can do is to bring out the best in all of us. To take the mediocre leader to a higher level; to take the good leader to be a brilliant leader; and, perhaps, to teach somebody who is not a very good leader that they may not be a very good leader and, perhaps, seek to do something else.”
Big Think+ is a video-driven employee development solution that virtually delivers world-class experts and learning programs to organizations around the world. Request a demo to learn how our instructional designers can work with you to create a program that fits your organization’s needs to help your employees become smarter, faster.