Impact of Employee Turnover on Organizations

Employee turnover is becoming more common in this day and age. According to the July 2022 Bureau of Labor Statistics report, 4.3 million people quit their jobs while 1.4 million were laid off. As a company, it is important to understand why this is happening, the effect this could have on your business, and most importantly, know how to respond to it. There are plenty of reasons why employees leave organizations. Some because of low pay, a lack of opportunities for advancement, and feeling disrespected, while some leave because they are marrying, going back to school, or migrating to another city or country.

This can cause ripple effects in different parts of your business. To start with, it can affect your teams’ engagement. Connections are very powerful and connections at work matter. When employees aren’t connected to others in the workplace, it is the business that suffers. Recent data shows that employees without connections have a 331% stronger intention to quit and a 176 % likelihood of seriously job seeking. Sadly, 43% of people don’t feel connected to the people they work with every day and this ends up affecting team engagement.

The second impact of employee turnover is that it’s expensive. Both the recruitment and onboarding process cost time and money, and finding the best talent for a competitive annual salary is also costly.?When an employee therefore leaves, expect some budget to go with them. Studies by SHRM estimate that every time a business replaces a salaried employee, it costs on average, 6 to 9 months of that employee’s salary. According to Glassdoor.com, the average salary for a mid-level employee is $71,540 per year so you’re talking a minimum of $35K in recruiting and training expenses which still doesn’t account for the loss of productivity.

Thirdly, losing employees hurts the company’s culture and morale. A strong company culture boosts employee morale and encourages people to genuinely work with one another. But when a superstar employee leaves, they risk hurting other employees and this can cause shifts within the team especially if the connection was great. No wonder there’s some science to the idea that quitting is contagious. When employees quit, it can negatively impact your company’s culture, and cause tension, stress, and uncertainty among your employees.

Lastly, it can lead to decreased productivity. Once employee engagement, company culture, and employee morale suffer, so does productivity. You might start to see things like increased burnout or a suffering employee experience as a result of this.

All of these factors then culminate into some sort of a snowball effect. When cost, lack of engagement, lack of morale, and lack of productivity gets together, it leads to poor business performance. Click here www.zydii.com to empower your employees.