How much employee turnover do you have each year?
10% turnover is considered healthy and normal. 30% turnover could destroy your business if things don’t change.
Why? Because the average cost for a new hire has risen to over $4000. For professional-level businesses, it’s much higher. And, the costs of turnover extend beyond just dollars and cents, as you’ll see in a moment…
Suppose you have 10 employees. If you have an unhealthy work environment or poor hiring practices and are losing 30% of your staff each year, you’re blowing tens of thousands per year just to hire. Even more if the problem is more severe or your costs are higher.
Turnover drains your business in seven major ways – some of which can cripple your company for years to come.
Here’s what turnover does to your business:
- Overworks your staff – other staff have to double up to cover the vacant position
- Costs money to replace – paying to advertise and/or recruit for the position
- Reduces institutional knowledge – this intangible asset benefits your employees as well as your customers. Long-time employees just “know stuff.” If your whole team has been there only a few years, no one realizes what’s being overlooked, but everyone feels the effects.
- Increases stress – the overworked employees burn out and need more time off
- Decreases morale – incomplete tasks take their toll on everyone over time
- Reduces productivity – overwhelm turns into resignation as phrases like “we did what we could” and “it’s just a job” start to creep in
- Unemployment costs – your legal and HR people have to spend time on this paperwork
If a lot of people are quitting, especially your good employees, this could be due to management, or you might have a toxic work environment. This is often caused by one bad employee – the one you should fire so you stop losing your better ones.
On the other hand, if you’re firing a lot of employees, you probably have an ineffective hiring process. It could also be just bad management.
Either way, if your turnover rates are too high, it is costing you tens of thousands per year that you could be using to invest in your business or just make more profits.
How do you reduce turnover?
Find the source of the problem – bad management, ineffective hiring, toxic work culture, something else – and then correct it. And when you hire the next round of people, don’t do it the way you’ve done it before. Use a different approach.
PainLess Hire has formulated a new approach to hiring. We aren’t a recruiter. We use a scientific process that results in only the top candidates being sent to you for the final round of interviews.
We do everything before that final round so you don’t have to spend hours and hours doing interviews, scouring resumes, gauging personalities, and second-guessing each other.
You can be assured of having only the very best candidates to choose from. And as long as you have a healthy work culture, using our system should reduce your turnover problem and save you tons of money that you won’t have to pour down the drain hiring 30% of your staff every year.