It’s always frustrating to lose a valued team member to another company, but you may not realize the detrimental impact it has on your business. It costs approximately 150% of an employee’s annual salary to replace them, rising to 200% to 250% for managerial positions. For example, if you lose an entry-level employee earning $30,000 per year, it will cost $45,000 to find a replacement!
Clearly, it costs a lot of money to replace even one entry-level employee, but imagine what your budget would look like if you lost 10? Thinking about that will definitely give you a headache. The importance of hiring right the first time and working hard to keep your team happy cannot be emphasized enough.
4 Costly Side Effects of Turnover
The adverse impact of turnover is much more than just a money issue. Learn four highly negative costs associated with this issue:
Lost Knowledge
When an employee leaves, they take all the information acquired during their tenure with them. Sure, they can write detailed instructions on how to complete their tasks and pass on helpful information to their predecessor, but it’s impossible to transfer all their knowledge to the next person.
Overworked Employees
In most cases, you won’t be able to find a permanent replacement for a person prior to their last day. Consequently, your existing staff is forced to take on additional responsibilities in the interim, which leads to burnout. People can only put in so many extra hours before their levels of job satisfaction drop.
Low Morale
It’s disheartening to work in a revolving door environment. Even employees who like their jobs are bound to find coming into the office disheartening when they’re constantly losing colleagues. It’s hard to remain engaged when your team is in a seemingly permanent state of disarray.
Customer Service Errors
Customers don’t like to do business with a company in chaos. If they’re frequently forced to build a relationship with a new sales rep or they call your customer service hotline and have trouble getting answers from brand new employees with little company knowledge, you can be certain this will hurt your brand.
Need a little help finding the right person for the job?
Contact Premium Staffing, Inc. As engineers ourselves, with a specialty in manufacturing, you can be certain that we speak your language.