EMPLOYEE TURNOVER COST
Employee turnover costs may be defined as the cost of separation, replacement, training and productivity when an employee departs. According to the Society for Human Resources Management total turnover costs may be calculated as 50% to 60% of the employee annual salary.
In the accounting profession, the American Institute of Certified Public Accountants noted an increase in employee turnover rates according to their latest 2016 survey data*. The turnover rate increase may be due in part to the following reasons:
How to reduce turnover costs?
Some companies may try to reduce turnover by throwing cash to their employees. Although Compensation is still important, there are low cost ways to decrease turnover. Some of the non- monetary compensation initiatives that may be implemented to lower turnover costs are the following:
Busy Season Staffing Solutions can assist your company in the recruiting of professionals both for regular employee needs as to temporary staffing.
Contact us at 787-918-1890, [email protected] or using the employer request staffing assistance section.
In the accounting profession, the American Institute of Certified Public Accountants noted an increase in employee turnover rates according to their latest 2016 survey data*. The turnover rate increase may be due in part to the following reasons:
- Millennial generation- Became the largest generation in the workforce. Millennials are less loyal to employers changing jobs multiple times during their careers.
- Availability of information and connections - Social media and salary confidential data websites, such as glass-door, may provide information about salary and benefits at other companies that was not widely available in the past. You may be surprised to what you may find about your company at such websites used widely by millennials professionals.
- Stagnation - Some companies have top management staying longer at their positions than prior generations. This may be stagnating the professional growth of younger employees who may think that they need to change jobs to a company with a different culture in order to be able to become part of top management.
How to reduce turnover costs?
Some companies may try to reduce turnover by throwing cash to their employees. Although Compensation is still important, there are low cost ways to decrease turnover. Some of the non- monetary compensation initiatives that may be implemented to lower turnover costs are the following:
- Thanking employees - All employees like to feel appreciated but this is especially important to the millennial generation who are noted by some as the "trophy" generation since they are used to be recognized constantly when performing well. Although this may seem awkward to prior generations that did not received such constant encouragement from their employers, thanking employees constantly is a no cost way of keeping them at your company.
- Providing constant feedback - As noted in our prior August 2016 newsletter "Millennials Generation at the Workplace" many Millennials grew up with "helicopter" parents, as such they are used to constant feedback. Therefore, providing constant informal feedback instead of waiting for mid-year or year-end review may decrease turnover costs and increase productivity.
- Creating a flexible career path - Having a career path may lower turnover as it makes employees visualize themselves at your company in the future. It should be flexible to accommodate the diverse needs of the company.
Busy Season Staffing Solutions can assist your company in the recruiting of professionals both for regular employee needs as to temporary staffing.
Contact us at 787-918-1890, [email protected] or using the employer request staffing assistance section.
For resources for SHRM and the AICPA refer to the following links:
SHRM Turnover Costs
Busy Season Staffing Solutions - MILLENNIALS Newsletter
AICPA 2016 National MAP Survey
Disclaimer: The information presented above is for information purposes only and do not represent legal advice. Before making any decision you should consult your own legal advisor.