Surprise! Turnover is Even Worse than You Think.
Just when you thought turnover was bad enough, another bit of depressing news hits you in the face. I hate to be the one throwing a punch (ouch!), but I think it’s important for you to know the bigger picture. And, to understand that the costs are more than the ones you probably already know about: administration (accounting, payroll, benefits), recruiting, the interview process as a whole, orientation, and training—to name a few. The price tag of these activities adds up quickly, with many companies spending as much as 200% of the position’s annual salary to replace a lost employee.
Those are mostly tangible costs, which you can actually calculate if you want to spend your time doing that. (It’s probably a good exercise, but it won’t be very fun unless you like spreadsheets. Really like spreadsheets.) The intangibles, though harder to quantify, are real. Here’s what you’ll be dealing with the next time you let another employee walk out the door:
Lower morale. Depending on the person, a resignation can be a real blow to your team’s spirit. If that person was a mentor, or a cheerleader, or a workhorse, or the one who always brought in home-baked treats, your team is going to feel a painful void. They may feel lost, sad, and unmotivated—for a longer period than you might expect. This growing unhappiness distracts employees from their work and can straight-up kill productivity. Now you haven’t just lost one productive person, you’ve virtually lost a whole team.
Increased workload. It’s rare that, when someone resigns, a replacement pops up like Pez in a dispenser. It takes time to fill that position—if you’re following best practices of hiring slow, anyway. Which you should be. A careful and deliberate recruiting approach is one of the first ways to ensure you won’t be doing it all over again in a few months. The downside of doing it right is that, in the mean time, the rest of your team is taking on the extra burden. In a short time, resentment can start breeding—and the focus of that resentment may be on you for not doing enough to prevent the loss in the first place. In addition to mild to moderate hostility is the reality that you’re stretching your team too thin. The added workload may not be sustainable over time, and your team may begin to wear down and burn out. Now you have another hit to productivity. And some possible wellness concerns, too.
A potential chain reaction: When an unhappy employee leaves the company, the source of the dissatisfaction is usually not a secret. That employee’s peers may start to wonder why they should stay—especially if the recently departed was trusted and respected. It’s common for team members to re-evaluate their situations in the wake of a resignation. They may begin to question their own choices or even feel foolish for hanging on in the face of such strong evidence that they shouldn’t. And, so, one by one, your best people start filing out the door. That’s one scenario. A mass exodus may also occur because of the culmination of lower morale, increased workload, AND pressure to follow suit. A triple whammy.
It sounds a bit apocalyptic, doesn’t it? But it does happen—more often than you might think—and it can happen to your organization if you aren’t creating an environment where your most talented (and influential) people want to stay.
Are you at risk? Learn how to spot the signs by checking out Why Your Talent is Leaving.
Are you already in the throes of a turnover catastrophe? We can help! Our solutions address employee needs from first days and beyond, helping you create a strong culture and a great place to work. The kind of place great people run to—not away from!
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About the Author:
Allison has been a professional writer since 2002, with experience working in a variety of business environments dating back to 1993. Her breadth of knowledge comes from time spent on both the manager and employee sides, as well as her years immersed in the employee recognition industry. As a writer, she insists on the Oxford comma, loves to un-dangle dangling participles, and often indulges in the subjunctive mood. True story.