how to reduce the cost of employee turnover.

High employee turnover is more than just a headache for Canadian businesses—it’s a costly issue. According to a recent survey, 28 percent of Canadian companies expect turnover rates to rise in 2024, with the average cost of employee turnover reaching a staggering $30,674 per employee annually. For some organizations, these costs soar even higher, with 15 percent of businesses estimating turnover expenses to exceed $100,000 per employee each year.

Why are employees leaving? The primary reasons include better pay and benefits offered elsewhere (37%), employees resigning voluntarily (31%), increased workplace demands (25%), retirements (24%) and a competitive job market (24%).

These numbers highlight the urgent need for businesses to address the root causes of turnover, rather than just managing its aftermath. For employers, it’s not just about replacing a departed employee. The ripple effects include lost productivity, lower morale and even a damaged company brand.

what’s the real impact of employee turnover?

Employee turnover goes beyond the loss of a great worker. It brings various costs associated with finding and training a new person, impacting your bottom line. Some of these costs include:

• Lost work time while the role remains vacant
• Expenses linked to promoting the open position
• Time and resources spent on the hiring process, including screening and interviewing candidates
• Onboarding processes and training for the new hire
• Fixing mistakes made by inexperienced employees
• Lower morale and engagement among current employees

High turnover can also negatively affect overall productivity and increase the workload on other employees, potentially leading to burnout and further turnover. It’s a cycle that’s costly in more ways than one.

a strong employer brand to the rescue!

A strong employer brand can go a long way in cutting down the cost of employee turnover. With job boards and social media, it’s easier than ever for employees to share their work experiences, and a few negative reviews can quickly hurt your company’s reputation. When unhappy employees voice their complaints online, it can impact how hundreds of potential candidates see your business, making it tough to attract the best people.

To prevent this, focus on building and maintaining a positive employer brand. Here are some ways to do that:

• Encourage employee feedback regularly. Use surveys, emails and even anonymous suggestion boxes to understand what your employees need from their work environment and from you as an employer.
• Provide a forum for all voices. Allow employees of all levels to share their opinions and ideas. A workplace where employees feel heard is less likely to experience high turnover.
• Prioritize transparent communication. Be open and honest with your team, whether sharing good news or addressing challenges. Clear communication can prevent misunderstandings and build trust.
• Create an inclusive company culture. Embrace diversity and make sure all employees feel welcome and valued. A positive, inclusive workplace culture can improve employee retention and reduce the cost of employee turnover.

practical strategies to address the cost of employee turnover

Reducing turnover isn’t just about building a strong employer brand. It also requires concrete strategies to meet employee needs and improve engagement. Here are some effective methods:

• Offer competitive compensation and benefits. Meaningful pay and benefits that truly meet the needs of your employees are crucial. Use resources like Randstad’s salary guides to ensure your compensation is in line with market standards.
• Invest in upskilling and development. Provide opportunities for growth, whether through training, mentorship or career advancement. Employees who see a clear path forward are less likely to leave.
• Enhance the onboarding process. A strong start is essential. Effective onboarding helps new hires feel welcome and prepared, reducing the risk of early turnover.
• Monitor and address employee retention problems. Keep an eye on turnover metrics and address issues before they escalate. Regular assessments can help identify patterns and areas of concern.
• Promote a healthy work-life balance. Offering flexibility and supporting employees’ well-being can significantly lower turnover and improve overall morale.

Addressing the cost of employee turnover requires a multifaceted approach that combines a strong employer brand with strategies that support employees’ growth and well-being. By doing so, you can reduce costs, improve overall productivity and create a workplace where top performers want to stay.

Are you facing a surge in employee turnover and urgently need to hire new talent? We’re here to help with our extensive pool of specialized professionals. Reach out to us today to discuss your specific requirements.