As a business owner, you know how important hiring and retaining top talent is. But what happens when employees leave your company? Employee turnover can have a significant impact on your bottom line, costing your business both time and money. Let’s explore employee turnover costs and why it’s important to prioritize employee retention.
1. Direct Costs
Firstly, there are direct costs associated with employee turnover. These include the cost of recruiting and hiring a new employee, as well as the cost of onboarding and training them. According to the Society for Human Resource Management, the average cost-per-hire is $4,129, and it takes an average of 42 days to fill an open position. This means that every time an employee leaves your company, it can cost you thousands of dollars and several weeks of productivity.
2. Indirect Costs
Secondly, there are indirect costs associated with employee turnover. These include the loss of institutional knowledge and experience, as well as the impact on team morale and productivity. When an employee leaves, their work still needs to be done, leading to increased workload and stress for the remaining employees. Additionally, turnover can lead to a loss of trust and confidence in leadership, which can ripple throughout the organization.
3. Long-Term Costs
Lastly, there are long-term costs associated with employee turnover. These include the impact on customer satisfaction and brand reputation. When employees leave, it can disrupt the customer experience and lead to a decline in service quality. This can have a negative impact on your reputation and make it harder to attract new customers.
Employee turnover can have a significant impact on a business. It’s important to prioritize employee retention and create a workplace culture that values and supports employees. Schedule a demo with Refered today and see how our referral programs can help your business avoid dealing with the costs of employee turnover.