Most people understand the frustration of losing an employee
Employee turnover is a common challenge that many companies face. While it's natural for employees to leave an organization for various reasons, it can be costly for companies. In this blog, we will discuss the cost of turnover for companies in terms of quantitative and also subjective costs.
Quantitative costs are the most apparent costs associated with turnover, which can be easily measured and quantified.
These costs include the following:
1. Recruitment costs:
When an employee leaves, the company needs to replace them, and this process can be costly. The cost of advertising the job opening, the time spent reviewing resumes, and conducting interviews can quickly add up.
2. Onboarding costs:
Once a new employee is hired, they need to be onboarded, which includes training and orientation. This process can be time-consuming and costly, especially if the new employee requires extensive technical training.
3. Productivity costs:
When an employee leaves, there is a temporary loss of productivity. The remaining employees may need to pick up the slack until the position is filled, which can lead to decreased productivity and increased workload. This can also have a negative impact on the customer service experience as a hiring team waits to fill the position.
4. Lost revenue:
The loss of an employee can lead to lost revenue if they were a high-performing employee who contributed significantly to the company's success.
Subjective costs are less tangible costs associated with turnover, which can be difficult to measure. Yet they are still important to remember.
These costs include the following:
1. Morale:
When an employee leaves, it can impact the morale of the remaining employees. They may feel demotivated, disengaged, and less committed to the company.
2. Cultural impact:
Losing an employee can also impact the company culture. If the employee was a good cultural fit, their departure can affect team dynamics and disrupt the company's culture.
3. Knowledge loss:
When an employee leaves, they take with them their knowledge, skills, and expertise. This loss can be challenging to replace, especially if the employee had a unique skill set or experience.
Employee turnover can be costly for companies in terms of both quantitative and subjective costs. To reduce turnover and mitigate these costs, companies need to create a positive work environment, provide opportunities for growth, development and offer competitive compensation and benefits packages.
DPI can support with tools and resources to mitigate the constant turnover of the team. By investing in employees with leadership training and team building activities, companies can reduce turnover, increase employee satisfaction, and improve their bottom line.