Every time an employee leaves a company, voluntarily or involuntarily, it has larger implications than just the loss of one person. An article on the HR blog of Zane Benefits details the real cost of losing an employee and the best practices of worker retention. It’s no secret that “frequent voluntary turnover has a negative impact on employee morale, productivity, and company revenue." Studies have found that in many cases, losing an employee can cost double their annual salary, due to recruiting expenses, time lost, and training.
As such, businesses should consider the “real” cost of losing an employee. According to Deloitte study, these implications can include the full cost of hiring a new employee, lost productivity, lost engagement by coworkers, and a blow to morale and company culture. More companies need a system of tracking these markers, so they could gain metrics of seeing just how financially impactful it is to spend time recruiting, hiring, and training people. The losses are often staggering, making employee retention a critical part of a successful business. This goes beyond the “human element” and has real financial impact and reverberations can be felt for years around a company.
Zane Benefits also outlines best practices for employee retention, including a benchmark for a retention rate, creating a “high-feedback environment” for workers, and the conduction of thorough exit interviews for employees at every level. The true cost and impact of employee turnover is too often intangible, and lessons aren’t gleaned where they could be. Tracking more of these costs and keeping better track of employee satisfaction and corporate morale can do a lot to mitigate these costs and prevent turnover in the first place.