The Cost of Losing Employees
Losing employees is expensive for your company. This is not a new revelation. Rather, it is a harsh reality that human resource professionals live with daily.
A recent study* underscored the importance of this fact by determining the value and the amount of money lost when employees of various seniorities leave your company in search of new opportunities.
Quantifying The Loss of an Employee:
$7,000 – Cost of replacing a salaried employee
+ $10,000 – Cost of replacing a mid-level employee
+ $40,000 – Cost of replacing a senior executive
$57,000 – Total Cost of losing one employee from each seniority level
How to Increase Employee Retention
When you put it into financial terms, you can save your organization $57,000 a year by retaining one salaried employee, one mid-level employee, and one senior executive. The most effective way to achieve these savings is to make an investment in employee incentive and employee recognition programs.
Implementing a program that allows you to foster higher levels of employee engagement and recognition can be a key to your success. In addition to adequately supporting an employee’s need for growth and stimulating work, rewards and incentives for high performance are excellent ways to increase employee retention. Non-cash incentives have been shown time and time again to be more cost effective and more memorable drivers of engagement than cash bonuses.
Non-cash rewards can include:
Incurring losses of $7,000, $10,000, and $40,000 every time an employee departs is simply too costly. It’s time to get proactive and make small investments in incentive programs. Your dividends in terms of reduced training costs and increased productivity will far exceed the expenses of the program.
For more information on how to retain your employees utilizing cost-effective incentives, rewards and recognition programs, please click here or send me an email at firstname.lastname@example.org to discuss further.
*Source: Recruiting Times, U.S. Department of Labor, PricewaterhouseCoopers/Saratoga, Bureau of Labor Statistics