One of the worst drains on a business’ resources is the cost of losing talented employees.
Companies that pay attention to their employees and work hard to retain talent in the organization reap numerous rewards—and on the flip side, the negative impact of losing talented employees can be significant.
No matter how well-planned the transition of responsibilities to a new person may be, knowledge always goes missing. Tiny, crucial pieces of information often get lost in translation or overlooked when employees leave. Keep reading to discover exactly how employee turnover harms your business and what you can do to change it.
The True Cost of Employee Turnover
It might be knowledge of a customer’s preferences, a great relationship with a competing department, or the intricacies of deciphering a job-specific spreadsheet. When someone quits, it can take months or years for a new person to figure it all out.
During the time it takes to recruit and hire a suitable replacement, the entire team will be less productive. You will either face the challenge of the work not getting done or temporarily reassigning those job tasks to someone else on the team. While a temporary reassignment may seem manageable, it’s not uncommon for the recruiting process to take longer than expected. In the interim, you risk overworking and alienating the team member or members who have taken on the additional burden.
You also have to consider the costs of recruiting, interviewing, and training the new employee. Social-media ads, headhunter costs, travel expenses, the time multiple interviewers take away from their other workplace responsibilities, job training, and months of on-the-job or formal orientation to the position all have a cost, and they all add up. Some experts say the cost of turnover may run as high as 150 percent of the employee’s annual salary.
Retaining Your Employees with Strategic Leadership
The most successful companies understand that employee retention has a direct impact on their bottom line. Leaders know the importance of helping people on their team have a positive work experience. They help every employee on the team understand how his or her work fits within the company and why it matters.
Leaders who help all of their employees understand the company’s mission and how their roles matter to the business motivate their team members to perform at their best. Every employee wants to know that the work they do each day is meaningful and valued. One of the most important actions you can take as a leader is to make sure everyone on your team can articulate how they fit within the company and why they matter to your success.
Great leaders also know how to address performance challenges with ease. CMOE has helped thousands of leaders improve employee retention and maximize the performance of their teams. Contact CMOE to learn more about how we can help you.