The True Cost of Employee Turnover
Studies on the cost of employee turnover have come up with varied results, but without question none of the results are an amount an organization wants to prepay.
A Wall Street Journal* report has estimated the total cost of replacing an employee is 1.5x to 2x the annual salary of that position! That’s $75,000-$100,000 for a mid-level employee and in the hundreds of thousands of dollars for higher level managers, executives and above.
More modest reports have broken it down this way:
16 percent of annual salary for high-turnover, low-paying jobs (earning under $30,000 a year).
For example, the cost to replace a $10/hour retail employee would be $3,328.
20 percent of annual salary for midrange positions (earning $30,000 to $50,000 a year).
For example, the cost to replace a $40k manager would be $8,000.
Up to 213 percent of annual salary for highly educated executive positions.
For example, the cost to replace a $100k CEO is $213,000.**
So what can you do retain your most valuable assets, your team members? Here are some suggestions that ClutchPower can provide for your team.
1) Provide a forum for open and honest communication
Employees love to receive the breaking news or “inside information” before it’s released to the public. It makes them feel like they are really part of the team, not just another person. So, while you can’t always tell your team everything before official announcements, releasing enough information to them to make them feel special is important.
Just as important is their ability to communicate openly and honestly to their direct reports. In an earlier post entitled A Picture is Worth 1000 Words we talked about how LEGO SeriousPLAY can be used to draw out this open communication in a very effective way. ClutchPower thrives at creating workshops that ask questions that an organization wants to know and draw out the real answers from its team members.
2) Have your employees engage in team building and collaboration focussed events
Finding or creating events that require collaboration or create the feeling of “team” are vital to employee retention, especially in newly formed organizations, start-ups, and companies experiencing rapid growth. The sooner an employee can feel like they are a part of the team, create connections with others they work with, and feel like they are a part of something, the less likely they are to be attracted to another employment opportunity and the more likely they are to invest in the organization (see “return zone” in the earlier graph).
Allow ClutchPower to create a workshop for your team that helps them see the importance of collaboration and/or brings a team together by identifying the skills that each individual possesses. These workshops are designed as fun activities to create maximum engagement and end with a time of debriefing the lessons learned and how they can be implemented in the workplace.
3) Introduce fun into the workplace
Monster.com wrote a great article about fun in the workplace including a story about Paper Airplanes that you can read here.
There are many things that an organization can do to introduce fun into the workplace, and by doing so they let their employees know that they are important for WHO they are not just WHAT they do; fun is what ClutchPower does best! Connect with us and let's create an event that your team will talk about for a long time to come!
So, what are your strategies for retaining your most important asset?
To discuss what ClutchPower can do for your organization, send us a message at firstname.lastname@example.org and let's create something awesome!
Center for American Progress: https://www.americanprogress.org/wp-content/uploads/2012/11/CostofTurnover.pdf Deloitte: https://www.linkedin.com/pulse/20130816200159-131079-employee-retention-now-a-big-issue-why-the-tide-has-turned Society for Human Resource Management: https://www.shrm.org/