The High Cost of Failure at Retaining Employees – Expensive and Dangerous
Retaining employees is one of the single most important aspects of your company. Even losing a low level worker can cost you big. Low estimates say that the turnover of a single eight dollar per hour employee will end up costing your company close to four thousand dollars when you factor in recruiting, interviewing, retraining, and loss of productivity that comes from the loss. With higher paid employees, retaining employees is even more vital. While every company will lose some employees each month for whatever reason, retaining employees can be done and your company can be more successful at it than you think. For now, however, let's take a cold, hard look at the real costs that come with a failure at retaining employees.
First, we'll continue with the immediate and obvious costs that come when you lack the skills needed for retaining employees. Many studies have been done in this area, and most report that thirty percent to fifty percent of an employee's annual salary is about what it costs to replace them. The steps needed for retaining employees, like benefits packages, may seem expensive until you realize what not retaining employees can really cost you. Why so much? Consider what you've already invested in the employee, then factor in the costs of attracting a replacement, interviewing applicants, reviewing them, hiring a replacement, and the cost of training them. Now add the cost of lost productivity, and you'll see why not retaining employees can be so costly.
There are unseen costs that come with not retaining employees as well. Mainly, your other employees take a hit when a coworker leaves, especially if they've been with the business for years. Morale drops and productivity follows. Retaining employees keeps everything working smoothly in your company, like a well-oiled machine. If you fail at retaining employees and one leaves, the entire department may have to readjust to their absence and then readjust to their replacement. Not retaining employees can have serious effects beyond the obvious.
Of course, retaining employees realistically means that you simply won't be able to keep all of your workers. Turnover is common, especially among newer hires. It's retaining employees who have been with you for an extended period of time that is so important. While not retaining employees that are newer will still cost you, the expense is nothing when compared to what failure at retaining employees of a higher level will be.
Many companies ignore the importance of retaining employees because they assume it's just part of operating a business. While that's true to a point, you should still never overlook the value of retaining employees or the high costs of not doing so. Unicorn HRO offers outsourcing and technology solutions that can help you with retaining employees of all skill levels. If you're tired of not retaining employees and watching your profits run down the drain, you need to make adjustments within your company to improve your ability at retaining employees. Otherwise, you're fighting a battle you may not be able to win.