One thing all businesses have in common no matter their size, income or location is the inconvenience of a skilled staff member resigning. It costs time, money and morale.
Turnover matters and unfortunately for employers, it’s increasing.
AON’s Salary Increase and Turnover Study from 2021 reported a 41% spike in voluntary employee departures compared to 2020. A total of 21.8% of U.S employees left their jobs in 2021, of which 17.2% (nearly 80%) departed voluntarily.
So what is this costing your business?
Whether it’s an HR resource, hiring managers or other management, someone in the company must conduct exit interviews, write and post job ads, review and screen applicants, interview candidates and conduct reference checks. But it doesn’t end there. There’s also tech setup and payroll administration. Once the employee starts, usually a dedicated resource must provide training and mentoring.
Depending on the type of role and size of the business, this process of recruitment and training can take anywhere from a few weeks to a few months of dedicated time that could have been used on other revenue generating activities.
A study from LinkedIn found that the average time to hire someone into a customer service role is 34 days. If you’re looking for a marketer, expect it to be around 40 and someone in research will take you an average of 48 days.
Therefore, every time an employee leaves you can expect about 1-2 months of lost productivity and another 1-2 months of partial productivity until the employee is performing in their new role. This can have significant negative impacts on project timelines, revenue, and stakeholder satisfaction.
Culture impact and stress
Often, when a role becomes vacant, one or multiple employees will need to pick up the slack. This leads to added stress and burnout for the remaining employees which does not bode well for culture or morale. If the departed employee was well liked by others or a key resource, this will cause an even bigger impact. Even the strongest corporate culture takes a hit when key team members leave.
Unhappy, worried, stressed employees take more time off and become less productive, impacting the overall success of a company.
According to a Gallup report, replacing existing workers costs one-half to two times the employee’s annual salary. If you had 100 employees at an average salary of $75,000, in 2021 this could have cost your company anywhere between $645,000 to $2.58 million in voluntary turnover alone.
The good news is that these huge impacts on time, culture and cost can be avoided! Employees want to feel valued and be fairly compensated. You provide both by partnering with Keep and offering an upfront vesting cash bonus.
When you choose to give indispensable employees upfront cash, it not only supports their personal financial situation – it can help to establish greater company loyalty and reduce the risk of them jumping ship. Your future self will thank you for it.