The Hidden Cost your Company Pays for High Turnover
Businesses that endure from high employee turnover rates know how time-consuming and expensive it can be. Still, some entrepreneurs and CXOs fail to understand the hidden cost of high employee turnover. Besides the cost incurred to replace an employee, there are other intangible costs making it highly important to recruit and retain top talents. This is the reason why employee retention is more important than ever for HR.
Here are some rippling effects and costs of employee turnover:
1. Overworked Staff
Someone has to fill in the gap, which often falls on the co-workers. For a business where customer service/orders and deadlines are its bloodline, this certainly means shelling out extra in the form of overtime. These people may be undergoing a range of different emotions such as grief/sadness for a co-worker who has left, hatred to filling in the gap, stress due to work overloads, etc. These factors collectively may lead to damaged morale thus, aggravating the turnover threat.
2. Poor Customer Service
Often, former employees take the critical customer experience and knowledge with them when they quit. This can result in orders getting misplaced, delayed deliveries, etc. For instance, an experienced salesperson, who quits his/her job could be the point of contact for a number of customers or an IT expert about to leave the company could leave his entire team perplexed when it comes to catching up with the mounting help requests.
3. Appointing Replacements
Other potential costs include finding and recruiting replacement employees and this include a range of things such as revising job profiles, posting employment ads on job portals, reviewing tons of applications, scheduling interview, training, on-boarding and more.
Things you can do to improve retention rates:
By recognising the costs both tangible and intangible, employers ought to take a more proactive approach when it comes to retain the top talents and understanding the factors that make employees to quit.
Equipping the human resources department with a powerful HR software is a smarter way to control retention rates. Yes, insights derived from HRMS software can help managers and entrepreneurs to measure performance of each employee. The data can be leveraged to identify factors that drive job satisfaction and experience.
Retaining top talents should be the top priority for every business and entrepreneurs and business leaders ought to identify the negative impacts of employee turnover and use these to curb those rippling effects.
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