In the past few years, employee retention has become an increasingly prevalent issue for companies, with several studies pointing to the different reasons your employees may be leaving.
Just last year alone, the Work Institute’s 2019 Retention Report found that 41.4 million U.S. workers left their jobs in search of better opportunities, equating to a 27 percent voluntary turnover rate.
By 2023, this number is estimated to increase to 35 percent. The Work Institute conservatively estimated that the cost to lose a U.S. worker is $15,000.
As the economy improves and more job opportunities appear, workers are growing increasingly restless. According to research conducted by ADP, more than 1 in 4 people change jobs annually – an unprecedented frequency of job switching. Moreover, ADP found that 63 percent of the average employer’s workforce is open to leaving for a new job at any time, and 46 percent would leave for a job that paid the same or less than their current position.
So, how can employers find and retain top talent? Sreeni Kutam, division vice president of major account services at ADP, said the findings boil down to two philosophies in conflict with one another: “me vs. we.”
Employee turnover costs money.
A 2012 study by the Center for American Progress shows that it costs a business roughly one-fifth of an employee’s salary to replace that employee once they’re gone.
These costs show up in obvious and subtle ways.
They show up in the hard costs of hiring a new person (what’s involved with advertising, interviewing and screening). They surface in the training and management time spent onboarding a new employee. More subtly, but no less significantly, these costs also show up in the time it takes a new hire to reach a predecessor’s productivity.
The more turnover a company has, the more these costs eat away at the bottom line. While there’s no way to eliminate employee turnover completely, here are five strategies that companies can implement to make it the exception and not the rule: