The cost of staff turnover is one of the largest – and hardest to calculate – costs to a business. There are five major elements to this cost, some tangible and others intangible. We like to think of them as five reasons to limit your staff turnover.
- Job posting
Whether you are posting your vacant position on a job seek website or going through a recruiter, you will be paying to advertise the position as long as it’s vacant. You are essentially paying for the role even without having someone in it. The more often you have vacant positions, the more often you will be incurring these wasteful costs.
The interview process costs businesses in terms of lost productivity as it takes leaders away from the business for hours at a time over what can be an extended period. As well as that, there can be high monetary expenses, such as travel expenses for out-of-town candidates. More importantly, the cost of hiring the wrong candidate can be astronomical later, so this is not a process that can be expedited.
- Training and onboarding
Like interviewing, training and onboarding costs businesses in lost productivity as existing staff are needed to lead and mentor new hires. On top of that, seminars, classes and courses can run to the hundreds or thousands of dollars.
- Probation period
Productivity of new employees is never going to be as high as productivity of existing staff members. Josh Bersin, founder of Bersin by Deloitte, estimates that it can take as much as two years to reach full productivity. They are more likely to make mistakes, give poor service and require help. Two years is a long time to have staff working at less than 100 per cent.
- Office morale
As well as the tangible costs of losing and replacing staff, there are intangible costs associated with high turnover. A staff that sees a constant rotation of friends and associates is going to be unsettled and disengaged. Members that remain may also feel like they’re being forced to cover extra work, or that they’re being left on a sinking ship. This can lead them to consider leaving themselves, keeping the cycle of high staff turnover going.
The cost of staff turnover is high, both directly financial and in terms of productivity. Luckily, you can minimise it by keeping staff happy. The first step is a good onboarding programme created using Intuto. After that, the courses can be used to maintain staff training, increase productivity and encourage open communication throughout your business.