Employee turnover costs can be a major burden for businesses of all sizes. It is one of the leading causes of business failure. According to a study by the Society for Human Resource Management, the average cost of replacing an employee is six to nine months’ salary. That’s a lot of money! In this blog post, we will discuss what employee turnover costs are, how they are calculated, and some retention strategies that can help reduce them.
- 1 Understanding Employee Turnover Costs
- 2 Reducing Employee Turnover Costs Via Employee Retention Strategies
- 3 Choosing Mantra Care EAP To Reduce Turnover Costs
- 4 Conclusion
Understanding Employee Turnover Costs
Employee turnover costs are the expenses associated with recruiting, hiring, and training new employees to replace those who have left the company. These costs can be significant, as they include not only the direct costs of advertising, interviewing, and onboarding new hires, but also the indirect costs of lost productivity and decreased morale.
How Employee Turnover Cost Is Calculated
To calculate the cost of employee turnover, businesses need to consider both the direct and indirect costs associated with losing and replacing employees.
- Direct costs include things like advertising, interviewing, and onboarding new hires,
- While indirect costs can include lost productivity and decreased morale.
The formula for calculating the cost of employee turnover is:
(Number of Employees x Average Salary) + (Training Costs x Number of New Employees) + (Indirect Costs)
Top Reasons Behind High Employee Turnover Costs
There are many reasons why employees may choose to leave a company, but some of the most common include:
- Poor working conditions
- Unhappy with company culture
- Dissatisfaction with salary or benefits
- Lack of opportunity for advancement
Reducing Employee Turnover Costs Via Employee Retention Strategies
One of the best ways to reduce employee turnover costs is to implement an employee retention strategy. A successful retention strategy will keep your employees happy and engaged, and help you retain your best talent.
There are many different retention strategies that businesses can use, but some of the most successful include:
Successful Employee Retention Strategies For Small Businesses
Small businesses often have a hard time retaining employees due to their limited resources. However, some retention strategies can be particularly effective for small businesses, such as:
- Fostering a strong company culture: Creating a positive and supportive work environment is one of the best ways to keep your employees happy and engaged. As part of your retention strategy, be sure to focus on creating a company culture that values employee satisfaction and development.
- Creating a positive work environment: A positive work environment is one of the most important factors in employee retention. If your employees feel valued and appreciated, they are more likely to stay with your company. Thus, it is important to create a work environment that is positive and supportive.
- Promoting open communication: Employees should feel like they can openly share their thoughts and concerns with management. This will help create a more trusting and productive workplace. In addition, it will help identify problems at the very onset, which can then be addressed quickly and effectively.
Successful Employee Retention Strategies For Large Businesses
Large businesses often have more resources to invest in employee retention, but they also face unique challenges. However, some of the most successful retention strategies for large businesses include:
- Offering competitive salaries and benefits: Offering competitive salaries and benefits: Compensation is one of the most important factors in employee satisfaction. To retain your best talent, be sure to offer salaries and benefits that are competitive with other businesses in your industry.
- Providing opportunities for development and growth: Employees who feel like they are stuck in a dead-end job are more likely to leave. As such, businesses should offer opportunities for employees to learn new skills and take on new challenges.
- Investing in employee assistance programs (EAP) like Mantra Care EAP: Employee assistance programs like Mantra Care EAP can help reduce employee turnover by providing support and resources to employees who are struggling with personal or professional issues.
Choosing Mantra Care EAP To Reduce Turnover Costs
Mantra Care EAP is a leading provider of employee assistance programs, and we are dedicated to helping businesses reduce employee turnover costs. We offer a range of services that can help employees deal with personal and work-related problems, and provide them with the support they need to stay healthy and productive.
Services That We Offer
Our confidential, convenient, and affordable services can help employees deal with a variety of issues – from work-related stress to personal problems. For instance:
- Employee counseling: We provide confidential counseling services to help employees deal with work-related stress, anxiety, depression, and other mental health issues.
- Stress management: We offer stress management services to help employees reduce their stress levels and improve their overall well-being. Such as yoga and meditation classes, and relaxation techniques.
- Work-life balance: We offer services to help employees achieve a healthy work-life balance. Such as time management coaching and conflict resolution.
- Support groups: We offer support groups for employees dealing with a variety of issues, including job loss, divorce, and grief.
If you have an interest in learning more about how we can help reduce employee turnover costs, contact us today. We’ll be happy to help you develop a customized plan that will meet the needs of your business.
Employee turnover costs can be a major burden for businesses of all sizes. Incidentally, it costs businesses a lot of money – there’s no doubt about that. However, by understanding the costs and implementing retention strategies, businesses can reduce these costs and keep their best employees. Moreover, Mantra Care EAP is one such solution that can help you keep your employees happy and reduce turnover costs. Contact us today to learn more about our Employee Assistance Programs.