Every business owner tries to avoid turnover like the plague. No one wants to lose valuable talent and no one wants to go through the process of hiring a new team member. There’s a lot more lost in losing an employee than many people realize. Turnover can be a devastating cost to an organization, and it’s incredibly important to understand how to reduce that expenditure. In this blog, we’ll discuss the true cost of turnover and how you can avoid it.

How Much Does Turnover Cost?

Lost Revenue & Exit Expenses

The cost of turnover often goes underestimated. Research shows that turnover can cost as much as 20% of an employee’s annual salary. This accounts for lost productivity during the transition period and the time it takes for a new hire to assimilate and perform efficiently. Depending on the role you’re looking at, this can be a huge chunk of change. For example, if you lost a salesperson who historically brings in $1M per quarter, you’re looking at a massive loss on your balance sheet if they leave your team. There can also be additional expenses, like severance packages that can increase this number if they’re terminated involuntarily.

Recruitment Costs, Job Advertising, and Lost Productivity

After you’ve lost your team member, it’s time to start planning to get a replacement. Recruitment can be a substantial investment for any organization. Recruitment costs can encompass a wide range, from 50% – 200% of an employee’s annual salary. This includes expenses associated with job advertising, applicant tracking systems, and the valuable staff time dedicated to interviewing and screening candidates. It’s important to think about why your previous hire left to make sure you’re only hiring people who will be successful at your organization. Consider utilizing a culture-fit interview to get the right people on your teams.

How to Avoid the Devastating Cost of Turnover

Reducing turnover is a priority in every organization’s mind. Implementing employee-centric initiatives, fostering a positive work environment, offering opportunities for professional development, and conducting regular feedback sessions/surveys are proven methods to enhance employee retention. You can utilize tools like MindGoal to better understand your people and target your culture’s pain points as efficiently as possible. Taking these proactive measures not only reduces the financial burden but also promotes a culture of loyalty, productivity, and sustainable growth. Remember, the cost of retaining valuable talent is much lower than the cost of replacing it.

Conclusion: Mitigate the Cost of Turnover with MindGoal Today!

Businesses will never be able to afford the cost of turnover. It can drain your resources on an unimaginable level, and keep you from achieving your goals. Protect your business from failure by fostering an environment where your people won’t want to leave. At MindGoal, we specialize in equipping businesses with the tools and strategies they need to tackle the cost of turnover head-on. Our tailored solutions are designed to help you retain your valuable employees and strengthen your organization. Leverage your culture to maximize performance with MindGoal today!

Contact MindGoal to learn how we can help you protect your business from avoidable turnover today.