The True Cost of Employee Turnover and the Simple Way to Avoid It
Employee rewards and recognition can dramatically increase retention, but how does that cut costs for your company?
Rewards & Retention
At times when businesses are inclined to make budget cuts and lower costs wherever it’s possible, spending on employee rewards might seem out of the question.
But what if research tells you that by spending on employee rewards you’ll actually be saving big money for the business?
- According to Qualtrics, Employees whose managers consistently acknowledge them for good work are five times more likely to stay at the company.
- On the other hand, 21.5% of employees who don’t feel recognized when they do great work have interviewed for another job in the last three months - according to TINYpulse data.
- In addition to that, GloboForce has found that 55% of workers say they would leave their current jobs for a company that clearly rewards its employees’ efforts and contributions -i.e. with a well-communicated employee recognition program.
- Furthermore, show that 79% of people who actually did quit their jobs cite “lack of appreciation” as their reason for leaving.
The True Cost of Low Retention Rates
If you’re thinking: ‘Losing an employee sure is a loss, but how is spending on rewards any less of a loss?’ just look at the stats TalentWise discovered:
- When employees leave, they take 70% of their knowledge with them.
- Replacing an employee can cost a company anywhere between 16% to 213% of the departing employee's annual salary, depending on their position.
- It takes an average of eight months for a new employee to become fully productive.
When it costs that much –money and time- to replace and train one single employee, imagine the nightmare your business will face if it becomes a trend and they start leaving in droves.
How costly does that employee reward seem now?