9 Reasons to Stomp Out Employee Turnover Costs

Employee Turnover Costs You More than You Think. Here’s How.

Many of us have had the job, often long in the distant past, where no one is going anywhere.

Throwaway, garbage jobs — at uninspired, Soviet-era companies— are not only depressing, they’re inefficient, expensive and bad for business. They inspire throwaway relationships with your customers and clients, and make your business into an expendable part of the overall community.

Deeper organizational problems come down to uninspired managers and absent or indifferent owners or stakeholders. Eventually even bad management gets fired, or the parents take the business back from their listless and distracted kids – and everyone is still threatened.

But that one engaged manager in the midst of all this turmoil can turn everything around, and very often, it’s the smell of money that will wake sleepy stakeholders.

In fact very often, stakeholders have come to assume that a company with high turnover will never be profitable – and that’s in part because high turnover is such an expensive problem.

For starters, the costs of running a revolving-door operation look like this:

1. Employees on their way out are typically working at anywhere from 25-50% less engagement than their fully engaged peers.

2. Immediate supervisors who need to cope with the loss are also working less efficiently.

3. Their fellow employees are also less efficient due to the distraction of someone walking out the door.

4. If the position is open for any length of time, the costs of replacing even one employee start to skyrocket. Now you’re looking at temp agencies and overtime pay or simply for someone else to cover for the open position.

5. Productivity of lowered morale – not just gossip and frustration, but pure lowered prospects make this a dead-end job, and you better believe lots of eyes are watching the door close behind every employee who leaves.

6. Now your new hire needs training, direction, oversight and you’re still not anywhere near to peak efficiency.

Of course, all of the above are only the soft costs. The hard fixed costs are better known, and generally by more people, especially in the HR area. Fixing a toxic company culture eliminates nearly all of these right from the beginning. These are just the most obvious costs associated with employee turnover but some innovative thinking could eliminate all of them.

Your also stuck with…

6. The costs of recruitment including advertising, interviewing, drug or background checks and all of the costs of the recruitment side of your HR department.

7. Severance and benefits administration for the now ex-employee.

8. Overtime pay for supervisors or anyone else covering the open post.

9. Administrative costs, paperwork, exit interviews and termination costs.

This is just the abbreviated version, too. Your bottom line suffers by these measures and far more, especially when we start looking closely at productivity. NimbleSchedule works closely with all kinds of companies working on today’s business model—and working towards, happier and more engaged, efficient and productive employees. It’s not just about giving flex-time and vacations to your employees and hoping they get it. It’s also about a smarter and more humane workplace that’s really fit for people.

No matter the level they’re working at, your teams and individual players, will reward you, a million times over, for fixing your morale problems, and your company culture. Make it enough that people want to come in every day, and you’ll also make it profitable. Let us know below what are the biggest costs to high employee turnover and what are you doing to eliminate them.



Photo this page: Cinnamon Rolls at Lily © Creative Commons Lic. by Chelsea Nesvig on Flickr
Karin Jakovljevic

About the author

Karin Jakovljevic

Karin Jakovljevic is the head of marketing at Ximble, a powerful, cloud-based workforce management system, simplifying employee scheduling and time tracking for retailers, restaurants and small businesses.

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