Employee turnover is a killer. After you’ve gone to the trouble to recruit, hire and onboard a qualified worker, losing that talent hurts productivity and — ultimately — profitably.
But what causes high employee turnover rates? And how can you reduce them?
There are many reasons an employee might leave his or her job. Not all of them are controllable. But there is at least one contributing factor you can control: your onboarding process.
In this article, we’re going to walk you through a process called “structured onboarding.” This is an organized, proactive process that incorporates forms management, task management, and socialization in the company culture. And research shows that employees who go through structured onboarding are 58% more likely to stay with the organization for three years or longer.
But first, a few things you need to know about employee turnover.
Very expensive. Replacing an employee who leaves their job can cost anywhere from two months salary to more than double the employee’s annual salary.
A study conducted by the Center for American Progress found that the cost of turnover varies quite a bit by job level. The average costs are:
So whether you’re compensating your employees at $10 per hour or $200,000 per year, expect to pay thousands of dollars each time you need to replace one of them.
Nobody can perfectly estimate the cost of employee turnover. There are too many factors to consider, and many of them are difficult to quantify. But according to Josh Bersin of Bersin by Deloitte, when you lose an employee, these are the costs you might rack up:
As you can see, employee turnover isn’t just expensive. It’s harmful to your company culture and your other employees.
OK, we know that employee turnover is expensive, but how bad is it really? The way we’re sounding the alarm, you might think that employees are dropping their jobs like hot rocks. Is it really that bad?
Yes. It might be even worse than you’re thinking.
According to a 2016 study by Compensation Force, the annual turnover rate for US employees is 15.1%. This means that 15.1% of all working Americans left their jobs that year. That number includes voluntary turnover as well as layoffs and firings.
Some industries experience higher turnover than others. The industries with the highest voluntary employee turnover include:
Not surprisingly, one of the top reasons employees give for quitting their jobs is a bad cultural fit. If a new hire gets the impression that that the people, customs, and practices at your company just don’t work for them, they are likely to start looking for yet another new job.
That’s why the first 60-90 days are crucial to your employee retention efforts.
Every employer should do their best to create an onboarding process based on current best practices. Experience and research shows onboarding is most successful when it increases employee engagement, emphasizes socialization, and puts your new employee on the fast track to contributing to your organization’s success.
This is why creating a structured onboarding program is so crucial. A standardized onboarding program shows your new employees that they are important to you and your company. Showing gratitude, checking in, and making people feel as if they are contributing are all great ways to ensure your new hires feel like part of the team.
A good structured onboarding program typically includes some or all of the following components:
Employers know that high turnover can be detrimental to their organizations. Many factors could lead an employee to leave his or her job, especially poor cultural fit. By implementing a structured onboarding program, you can help your employees fit in from the beginning, and avoid that dreaded turnover.
This article is intended only for informational purposes. It is not a substitute for legal consultation. While we attempt to keep the information covered timely and accurate, laws and regulations are subject to change.