When employees quit or put in their two weeks notice, it can be difficult not only for your business but also for your employees. However, unplanned and frequent employee turnover can be costly for your business. High turnover rates usually indicate that companies aren’t selecting the right employees, are failing to provide a motivating work environment, or are simply losing their employees to other businesses that provide higher pay and greater benefits.
What does this mean for your business if you experience this situation? Here are 4 ways that employee turnover can hurt your business:
Increased Costs – One of the most apparent ways in which high turnover can hurt your business is the increased costs that you will experience. Each time an employee leaves and is replaced, you will be spending more money. These costs include recruiting, interviewing, hiring, and training new employees. In addition, exit interviews and severance pay for the former employee can also cost your business.
Decreased Employee Performance – If you experience high turnover, you are sure to also see a decrease in your workforce’s performance. Not only will your team need to pick up the slack for the former employee, but they will also need to continue doing their own job. It can take about 8 weeks to get a new worker onboard and oriented. Meanwhile, your employees have to perform tasks with which they are unfamiliar, causing a decrease in your team’s productivity and morale.
Incomplete Work – Businesses that experience higher turnover rates may struggle to complete all of the necessary daily functions in the allotted time. If, for example, it takes 5 workers to complete one task but you only have 3 employed in that area, it will take more time for the task to be completed. In the meantime, you are left figuring out how to deal with the unfinished daily work requirement, which wastes your time and money.
Lower Knowledge Base – A constant change in your employees can mean a constant flux in the average years of experience your team holds. It also can mean that your employees are generally less familiar with their tasks, workflow procedures, and working efficiently with your customers. Studies have found that the more valuable the positions being turned over are to the company, the greater the impact it will have on current and future performances.
If you are experiencing high turnover in your business or you want to help prevent turnover from happening, Talent Assessment and Development can help! We provide expertise in several aspects of talent management, including candidate selection and assessment, executive coaching, training, team development, succession planning, and more. Get started today by calling us at (314) 485-1390 or by visiting us online at www.consulttad.com.