Turnover Turbulence: Understanding The Impact Of High Employee Turnover

If you own a small business or are just starting your enterprise, you know how important it is to manage costs. You don’t have the resources of larger and more established competitors, so you must pay special attention to where every penny goes. Although you may be focusing all of your attention on inventory or overhead, there are some problems that may be costing your company a lot of money without you being aware of them. One of the most insidious of these is employee turnover. 

increase business productivity

A certain amount of turnover is to be expected, for one reason or another. You can’t presume every person you hire will be the perfect fit for your organization. You also can’t expect everyone to stick with you when a better career opportunity emerges. That said, there is a limit to how much change your business can endure without suffering productivity loss. 


Courtesy Of Advanced RPO

Studies have found that losing an employee can cost a company as much as nine months of that person’s annual salary. This is because of the expenditures involved in recruiting and training a replacement as well as the production lost as that person gets up to speed. Typically, a new hire requires two to three months before he or she reaches the same level of productivity as the individual he or she replaces. If more than one position is going through this transition at the same time, the domino effect on your entire operation can be overwhelming. 

There are many reasons why a workplace may experience a higher-than-normal level of churn in your roster. Some of these can be chalked up to poor management or personality clashes. In many cases, however, the fault lies with the recruitment process. Inadequate hiring practices result in people being recruited without the proper skill sets or with incompatible personalities. Combatting these issues means confronting the systemic problems in your company head-on and with a critical eye. Establishing a strong corporate culture could be a big step toward solving excessive turnover, as can outsourcing recruitment practices. 

For these and many other steps to help keep staff attrition to a minimum in your small business or startup, take a close look at the accompanying infographic. It contains some solid, actionable advice as well as more information about the effects this condition can have on your organization. You already have enough to worry about — make sure you’re not allowing turnover to hinder your efforts. 

Author bio: Pam Verhoff is President of Advanced RPO, a talent acquisition company in Chicago, IL. Verhoff has extensive experience in building RPO businesses and solutions, as well as developing growth strategy.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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