You probably put the numbers game behind you when you finished your contributions to year end activities, and it may be cruel of me to bring it all back with some statistics so early in the year, but I can't resist.
Referencing statistics from the U.S. Department of Labor, we know the average turnover rate for employees is 3% per month. That tells us that if you are in an organization with as few as 100 employees you may be losing 3 employees per month.
Another statistic tells us that the rule of thumb in calculating the cost of losing just one employee is their annual wages and benefits package. The cost of losing an employee at even the lowest management level is up to 150% of their annual wages and benefits.
A closer look at how they come up with a monetary value of the loss of an employee tells us that we do not only incur the cost of advertising the vacant position. Other costs include overtime, loss in productivity, higher stress levels in remaining employees due to heavier workloads resulting in lower morale and absenteeism, the cost of training a new employee, possibly the cost of training an employee assigned duties to cover for the vacancy, lower quality which drives customers to competitors, and the list goes on.
Employees leave an organization most often because of their direct supervisor and the organizational culture. Interestingly, these employees will leave for as little as fifty-cents more per hour, some leaving for the same wage or less! Even in this tight economy, determined employees will find a place to go, and these determined employees are not usually the employees you would usher out the door if given a choice.
Develop a plan to keep your most valuable assets. Begin by investing in them. Show them their value to the organization by offering training opportunities. Employees that have been given an opportunity to grow personally and professionally create a domino effect by bringing their new skills back to work and others benefit as well as the organization as a whole.
Offering training opportunities also begins the change so often needed in an organizational culture. Your employees will feel more appreciated and valued by the investment in them, they will learn new skills to apply to their positions, they will be more energized to work hard for the organization, they'll foster higher morale within the organization, and showing your willingness to invest in them will certainly develop employee loyalty to the organization.
At the same time, while other organizations remain stagnant in developing their employees, yours will grow in ways that cannot be measured leaving your competitors at a disadvantage and leaving your organization in a better position to attract and retain a higher level of talent.
An organization with a high level of talent performs at higher levels and not only attracts customers, but delivers quality service that then turns to customer loyalty. Every organization wants to know their customers are returning, and also referring others to you.
This year, and every year, make it a priority to develop your employees. Employees at every level benefit from training. What doesn't benefit anyone is throwing money away on the replacement costs of losing employees. By investing that same money into training and growing opportunities for your employees, you position your organization to defy the statistics and continue to grow, leaving your competitors to play the turnover numbers game.
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