Irish companies are facing a growing problem when it comes to employee turnover and retention. Currently most companies have a growing employee turnover rate, which can make it a real challenge to retain staff. This challenge is just one of the many costs associated with having a high turnover rate. Subsequently this can cause numerous issues for your business; understaffing being just one of these issues. The overall cost of employee turnover is not always obvious, but it can be significant. Of course, some amount of turnover is unavoidable, however, there are both direct and residual effects if you have a high turnover rate.
What effects does this have on my business?
Finding a Replacement
Along with the day to day running of your business losing staff means that they will need to be replaced. Losing a staff member can have a huge knock-on effect. Changes to the roster can be disruptive for both employees and the business, often resulting in paying overtime to make up for the extra shifts. Not only does this put pressure on your current staff, it can impact your customers too, especially if the person who is leaving had a special rapport with regular customers.
If you have a revolving door of staff this can seriously effect employee morale. Nobody likes to see their co-workers constantly leaving and it can make them seriously question if they should leave too. As well as this it leads to a loss in engagement, and overall a loss in productivity for your remaining staff. Most businesses calculate their annual turnover rate; but if you think you have a problem with employee retention, it is a handy way to find out.
Use our free turnover rate calculator to find out what your turnover rate is now.
Loss of Productivity
A constant loss of staff leaves your remaining employees feeling unmotivated, as well as this, new hires just aren’t as productive as the person they are replacing. It takes time to learn your businesses routines and systems. Even if the have worked in the industry before they will need time to learn how your business operates specifically. This means that for at least the first few weeks (if not months) time will be taken from your existing staff as they answer questions and explanations. While the cost of this is not easily quantifiable it is still significant in its contribution to the loss in productivity.
At the end of the day employee retention, while it is an ongoing investment, will save your company money. It takes time and money to find new staff. Time spent looking for a replacement, reading through piles of CVs, conducting interviews, etc.; and that’s just the time allocated to hiring. It then takes time to train in new people. It takes time from your other workers as they help these new team members with questions and general integration. Time is money; but it is not the only cost associated with employee turnover. There are hiring costs, onboarding costs, and training costs. Some of the above costs are hard to estimate but can impact your business in a significant way. It is estimated that losing an entry-level employee can cost your business up to 50% of their annual salary. All in all, investing in new staff is a costly business that you don’t want to have to repeat on a regular basis.
For more information on employee turnover why don't you check out our post on the 'Main Causes of Employee Turnover'. Or if you want to get straight into retaining your employees we also have a post on the Best Ways to Retain Employees.