The Negative Impacts of a High Turnover Rate

I’m always happy to pass on great info...and this is great info! I’ve included a few snippets below lifted from the full article.

High turnover rates can negatively affect a company and its employees in many ways. With the constant need to hire and train new employees, it is easy to veer from true mission and vision of the organization. By retaining employees, companies can provide a higher caliber workforce that positively affects the bottom line. Businesses can lower turnover rates by providing adequate training, rewarding employees for a job well done and creating a company culture of trust.

Revenue

Employee turnover has a direct impact on company revenue and profitability. For example, according to the "Organization Science" magazine, the estimated cost of a lost employee earning $8 per hour at a retail chain store is $3,500 to $25,000. Aspects contributing to this include hiring expenses, training labor, lost sales and productivity. Obviously, the revenue impact can be much higher depending on the industry, employee’s position and wage. If a severance package is paid, this is an expense with no return on investment. Consider, also, management labor costs in placing classified ads, reviewing applications, interviewing and training. Although some companies utilize a job-placement service, this is still an expense. Additional expenses result from lost productivity or a lost customer base.

Low Workplace Morale

A high turnover rate can result in low employee moral. This may stem from overworked employees who have had increased workloads and responsibilities due to a lack of an active or trained workforce. New employees are not immune. They too may suffer from low morale as they struggle learning new job duties and procedures. Continuation of this type of work environment can result in the company having a more difficult time attracting and keeping high-quality talent.

Do you need more detail on this subject? Head on over to the full article here for more ideas and perspective. Afterwards, why not drop me an email to share your thoughts [email protected]; or call me on (0407) 743-276.

Thanks,

Greg