Managing your turnover has its financial advantages and requires housekeeping to deliver returns. HR Reporters Whats the Real Cost of Turnover? article revisits the ROI while addressing what weve known for a while: the estimated financial impacts fluctuate depending on industry, position, and location. Anecdotal evidence provides a range from 25% to 200% of annual salary.
Take for instance their featured example of a hospitality housekeeper in Alberta with detailed numbers. Termination, new hiring, training, and indirect costs roll up to a grand total of nearly CAN $3,200. And thats for a position that earns only $7/hour. So you are looking at more than the equivalent of 10 weeks of salary!
One survey found poor talent management practices are a big contributor to voluntary turnover: Thirty percent of 1,308 respondents said they left their job to seek new challenges or opportunities that were lacking with their previous employers. In addition, 25% of respondents reported leaving employers because of ineffective leadership, 22% cited poor relationships with their managers, and 21% said their contributions were not valued.
So, do some detailed housekeeping on turnover to determine how you can increase your retention rate for key roles based on your organizations industry, location, and turnover rate. Not only will you stem the natural tide of job churn in uncertain times, youll be surprised how much you can save in costs and gain in overall productivity.
And in these tough times, people are more uncertain than ever. Read Employees leaving? Here’s why and what you can do to learn more about managing and measuring the performance of your talent while filling the pipeline of succession.
