The cost of turnover...Do the math!
Updated: May 7
On The Job Training
Consider the best ways to close the skills gap. Let's look at what kind of #onthejobtraining we are offering employees. Do they feel like they are being groomed for success or are they just coming to work with minimal direction and told they need to follow their job description. Somebody need to mentor them and help them understand the culture and interpret their job description in more specific terms.
What about employees' career development? Are we providing them opportunities to grow and develop or are we stifling them. If they are not growing and developing they are wishing they were working somewhere else, or possibly actively seeking another job. Have we given them the opportunity to do something outside of their list of competencies? If we are not this is active disengagement. The number one benefit requested by Millenials is "development opportunities". If they are coming to work just to collect a paycheck they are not being productive.
What about coaching?
Are we coaching them to succeed with encouragement, feedback and direction of how they can improve and reach the clear cut outcome we have hopefully established for the task. Are we doing it without micromanaging or telling them how to do the task, just a vision of what the end result should look like in specific detail. Help them find their work meaningful.
Now let's break it down to basic math.
Here's why you want to do everything you can to retain good employees. If you have 350 employees and one in four will leave your employment in the current year that is approximately 87 employees. Now, if you do a good job of implementing the ideas outlined in this article you saved 67 of those employees from leaving.
It costs you... - 16 percent of annual salary for high-turnover, low-paying jobs (earning under $30,000 a year- a $10/hour retail employee would cost $3,328) - 20 percent of annual salary for mid-range positions (earning $30,000 to $50,000 a year- a $40k manager costs $8,000) - Up to 213 percent of annual salary for highly educated executive positions (a $100k CEO costs $213,000).
If they are all low paying jobs you just saved $223,000! Now if half of those you keep from leaving (by coaching and developing them) are high level positions it could be saving you over $7 million. Trust me! I have seen organizations that are losing nearly half of their top level employees through attrition, micromanaging by executive management or other mismanagement or office politics. Shocking when you do the math, huh? (Survey stats are thanks to SHRM.org)