Based on a 2021 report from the Bureau of Labor Statistics, current employee turnover rates are 57.3%, with voluntary turnover at 25%. A quarter of all employees leave their jobs because they aren’t happy and believe they will have more success elsewhere.
Turnover rates this high can significantly impact a company’s bottom line and, more importantly, create stress for the employees that choose to stick around.
The True Cost of Employee Turnover
The reality is that the hiring and training process is expensive. When a company is forced to replace someone, it doesn’t just cost them that employee’s salary. They must also pay for new recruitment, job posting, marketing, training and external relief for the time it takes to get an employee acclimated to the team and productive in their new role.
That is assuming the employee actually sticks around. If the problems still exist that caused the original employee to leave, the new hire might choose to leave, too.
The second significant cost of employee turnover is the inevitable strain it puts on existing team members. When a position is vacant, the work associated with that position doesn’t just disappear. Instead, another person within the organization must pick up that slack, reducing overall productivity and causing increased levels of stress and employee burnout.
Fortunately, most of the reasons employees leave are entirely preventable. Simply put, people are less likely to give up gainful employment within an organization that shares their values, recognizes their talent and offers competitive compensation, personalized benefits and career development opportunities.
7 Most Common Causes of Employee Turnover
1. Poor Compensation
Given the instability of the global economy, it’s fair to say that it’s pretty expensive to thrive in this day and age. People need jobs that afford them the ability to work full-time without worrying about whether they can pay their bills on time and feed their families. If a company doesn’t offer fair compensation that covers the bare necessities of life, their people will quickly find an organization that does.
People spend almost half their waking hours at their jobs, so all that time shouldn’t feel wasted. That’s why organizations must do everything in their power to create a fun, engaging and inspiring work environment. Employees that are continuously engaged in their work and happy with their environment don’t suffer from chronic boredom.
3. No Feedback, No Recognition
Whether it’s weekly feedback sessions, one-on-one meetings to evaluate performance or peer recognition programs, a tiny bit of appreciation can really go a long way. Employees love to know that their hard work is recognized and valued by their employers. Team leaders and supervisors should create systems that implement and enforce positive and constructive employee recognition on a regular basis.
Burnout is a leading cause of employee turnover and, unfortunately, it can be a cyclical issue that doesn’t have a simple solution. When an organization is short-staffed, ill-managed or struggling with turnover rates, employees are the ones who are forced to shoulder the burden. If an employer wants to improve retention, they must take the time to ensure their people aren’t overworked or underappreciated and fix the issues that made them short-staffed in the first place.
5. Lack of Growth
No one wants to find themselves in a stagnant job without the opportunity for career development and growth. If an employee believes there’s no upward mobility within their organization, they might choose to go somewhere else. If a company would like to reduce employee turnover and increase their team’s overall happiness and productivity, they should offer opportunities for advancement and regular career development.
6. Company Culture
Many people leave organizations based purely on an internal conflict with company culture. Employees love it when the organization they call home shares their values and promotes positive change in the world. Unfortunately, many people can also feel disconnected, disengaged and underrepresented by their company’s culture, which leaves them feeling unmotivated, uninspired and unhappy at work.
7. Impersonal Benefits
Benefits like health insurance, retirement funds, 401k and life insurance are essential components of an employee benefit program. However, they aren’t enough to stay competitive in today’s aggressive job market. A one-size-fits-all approach just doesn’t work anymore. After all, no two people are exactly the same, and their benefits shouldn’t be either.
Fringe’s customizable, personalized benefits platform puts the power back in the hands of the employees — after all, that’s where it belongs. It allows them to choose the benefits that will have the most significant impact on their lives. By serving the individual needs of their people, companies can make their people feel valued, combat burnout, increase compensation and boost employee retention.
Contact us today to get started and start giving back to your people.