The cost of hiring a new employee for any position is significant. The many formulas that calculate such costs vary widely, but can range upward of 200 per cent of an employee's annual salary. That includes not only the tangible costs of severance pay, vacation accrual, job advertising and recruiting fees, but also indirect costs such as the staff time needed for paperwork and recruiting, and orientation and training for new hires. Other hard-to-quantify costs can include customer dissatisfaction, poor employee morale and loss of revenue during transitions.
Let's assume the average salary in a given company is $50,000 a year. If the cost of turnover is 150 per cent of salary, then the cost would be $75,000 per departing employee. For a company of 100 employees with a 10 per cent annual rate of turnover, the annual cost of turnover would be an estimated $750,000.So, how to reduce your turnover rate? Start with a solid grip on the problem by answering these four questions.
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Companies lose $350 billion a year because of employee disengagement. Your company does NOT have to be one of them. Disengaged employees impact your business' productivity, level of innovation, and ultimately the bottom line.