When you think about the cost of employee turnover, your first thought might go to the monetary cost it takes to hire a recruiter or to post the position on a job board. Sometimes there are also costs associated with the interview and screening process or with helping relocate a new employee.
However, the real cost is much bigger than that. While it may not be easily quantifiable in the budget, employee turnover has a significant impact and cost to the organization as a whole.
One cost of employee turnover is a loss of productivity. Managers or HR directors spend a significant amount of time reviewing applications and setting up interviews when their time could be spent on other aspects of their job.
When an organization loses a valuable member of their team, it also impacts the productivity of other employees. Remaining employees may have to pick up extra job duties in the interim, which means their regular job duties could suffer until a replacement is found. Unless your organization has people whose entire job is training, there’s also a loss in productivity when experienced employees spend time away from their regular job duties to train newer employees.
It also takes time for a new employee to get up to speed, which is another cost to your organization.They have to adjust to the organization and the organization needs time to adjust to the new employee. They might not have the same experience as the prior employee, and they certainly won’t have the same knowledge about your company specifically.
And that’s another cost to your organization—loss of institutional knowledge when an employee leaves. You can try to capture some of that information prior to an employee’s departure, but there’s no way to download everything about your organization and processes from an employee’s head.
You can find a wide range of estimates about what percentage of an employee’s salary it costs an organization to replace them, but the answer is clear: employee turnover is costly. The sooner you can get a qualified employee in place to fill that position, the better off you are.
LSG Staffing Agency is here to provide assistance during your hiring process to ensure that you optimize time and resources. Contact us today to see how we can provide assistance.