Did you know that nearly 30% of U.S. workers plan to seek new employment over the next 12 months? And, that it costs around $10,000 to replace a single employee?
$10,000 to replace a single employee seems like a lot, but it makes sense when you factor the loss in productivity combined with the resources devoted to recruiting, hiring, onboarding and training a new employee. What’s more, we can expect much higher costs to replace members of the leadership team, who, incidentally, might also be looking for greener pastures. According to The State of Engagement Fall 2015 report, 42% of company leaders are open to new opportunities this year.
you encounter each day will move on to another job this year.
If my math is correct, a 7,500-person company can expect to shell out over $22 million within the next 12 months to replace 30% of their non-managerial work force.
Unfortunately, a drop in employee retention typically leads to some fingers pointed at company leaders and our friends in HR.
So how can Human Resources deflect the finger pointing and influence the ROI for employee retention efforts? For starters, HR can play a leading role in the strategic decision to invest in employee engagement programs that increase job satisfaction, loyalty, and retention. It’s a worthwhile investment, too. Research conducted by the Corporate Leadership Council discovered that the most committed employees perform 20% better and are 87% less likely to leave the organization.
We’ve created an infographic that outlines some of today’s employee retention challenges faced by HR professionals and company leaders. It includes some data that might freak you out a bit; like that $10,000 price tag to replace an employee, for example. Most importantly, it contains some employee retention strategies to help tame the freakout.
Of course, there’s no silver bullet to boosting employee engagement; and, even highly engaged employees may leave you. But, imagine what might happen if, through some targeted employee retention tactics, you reduced turnover by 5% (from 30% to 25%)? In our 7,500-employee company example, that’s 375 fewer employees that leave, equating to $3.75 million in cost savings. Taken a step further, the performance gains by retaining your top performers will drive incremental revenue gains for the company.
Rather than a cost center, HR can now be viewed as a cost reducer and, dare we say, a revenue generator.
Check out our infographic for data on the ROI of employee retention. You may also like our new guide loaded with employee retention strategies.