How Employee Turnover Affects Your Organization

Employee turnover sets your organization back and affects bottom-line results. As if finding top talent wasn’t hard enough, retaining and reducing employee turnover is even harder especially after putting the time, effort, and investment to hire.

Employees are the forefront of a company, be it B2B or B2C, employees are the influencers of your customer relationships and repeat sales. Retaining exceptionally talented, engaged employees is critical to the success of any business.

As employers, you may think employees come and employees go, it is a natural and inevitable part of business so why care?

Replacing good employees with people who have the same skills and knowledge needed for your company is next to impossible. The key isn’t just focusing on acquiring top talent but more so retaining it. Turnover in any format has a huge chain reaction on an organization. It can increase expenses, puts a damper on the productivity, and affects the overall company culture.

Expensive

Top talent is an indispensable asset to a company and there is no doubt that employee turnover is expensive. For an employee with a mid-range salary ($30k to 50K a year) it can cost upwards of 20 percent of their annual salary to replace. Upon an employee's departure, there are additional complex costs such as the cost of off-boarding, cost of hiring, and the cost of onboarding a new person.

Drains Your Company

As time progresses a company's current talent develops in a multitude of ways. They gain new skills, understand the business better, and they build relationships. When an existing employee chooses to part ways with their existing organization they take those capabilities and contacts with them and the company loses that value. As new talent comes into an organization they have to start from the beginning: understanding the business, building those skills, and relationships. This puts a set back on the productivity within the department and affects the bottom-line results.

Effects Company Culture

Company culture varies from one organization to another. When an employee initially comes into an organization they begin to build work relationships and those relationships affect their overall productivity, engagement, and satisfaction. The more common employee turnover is within your organization the more it will affect the company as a whole. If employees leaving becomes the “norm”, the more employees won't take the time to invest in relationships with people around them thus, negatively affecting the overall work environment.