The Outrageous Business Cost Of Employee Turnover
If you've attended any of my workshops, seminars, read any of my articles or spoken with me lately, you've heard it more than once that the cost of employee turnover is outrageous and not going to go down in the future because of workforce shortages, yes both quantity and quality.
During the last seven years, major research studies have conducted to unravel the mysteries of employee turnover. Many of the items negatively impacted by high turnover and churning are not combined or listed on your P & L, i.e., poor employee morale, high scrap rates, increased overtime, increased workers comp expense, declining Supervisory attitude, etc. In fifteen national studies on the turnover cost of an $8.00 per hours employee, using the average of three highly respected organizations, SHRM, AMA and the DOL, the average cost was $4277.68, or 25.7% of this employee's annual wage. (if you would like a copy the results of these 15 studies, send me an email at [email protected]) Moving up the salary structure, the figures become more horrifying: Entry Level/Secretarial/Administrative: 50%; Service and Production: 60%; Skilled and Professional: 100%; Supervisors, Middle Management: 125%; Engineers, IT Specialists: 200%!
Perhaps it's time explore where these estimate come from, then if you do not believe the results you can come up with your own figure. And believe me you will probably be shocked by the results if you have not tried this before.
Starting Assumptions In order to do this exercise, we need to start with a few basic assumptions. The first is that you know or can find out how much certain things cost, both in money and time. The most important of these is the value of your own time to your business. I'm not talking about your salary here. What ma ...
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