Another One Bites the Dust – What Is Employee Turnover Costing Your Business?

Finding and keeping good employees has always been a top concern for companies. This long-time challenge for employers is increasing over time. In 2016, total turnover rate in the U.S. was 18.1%, up from 12% in 1996.

A job is no longer a place to put down roots and grow. The more contemporary employee mindset sees employment as a journey, with many stops to satisfy various needs; resume building, skill refinement, personal growth, and other motivations unrelated to the employer.

When employees leave, they take your investment with them. So what are you spending on recruiting, hiring and training a new employee? Knowing the true cost of turnover in your organization can help identify what you can afford to spend on employee retention. You are already spending it anyway… you might as well get better results!

It all adds up

To figure the cost of recruiting good, qualified employees, consider the basics. Recruitment requires getting the word out effectively… posting on just a few popular job boards will cost anywhere from $400 to $1,500 per position. Those postings are created by your HR professionals ($$), provided you aren’t working with a professional recruiting firm (more $$). Time spent on optimizing ads, screening applicants and setting up testing and interviews is not often considered. Other hard costs include hiring supplies and materials, drug testing, background screening, etc. According to a poll of 2,048 American companies conducted by SHRM in 2016, the hard costs of hiring average $4,129 per employee. The SHRM poll also found it takes an average of 42 days to replace an employee, which equals dollars gone in productivity and efficiency.   

So you’re spending thousands to hire… and training expenses aren’t cheap either! ADT’s 2016 State of Industry report shows that employers invest 33.5 hours and $1,252 per employee each year in training time and cost. 

In addition, there are hidden costs to training that also add up quickly… supervisor and employee time during training, time and travel to training/networking sites, instruction materials and loss of productivity while the new employee is ramping up.

See for yourself

Check out our cost calculator to know exactly what employee turnover is costing you. Then consider your options for reducing your turnover now. There is a better way!   

Fortunately, you can implement systems to reduce turnover. Learn how to hire the right employees and keep them instead of flushing money down the turnover drain!  Our system for hiring right (the first time) can get you on the path to fixing this expensive and frustrating problem.