The cost of replacing workers can hurt an employer’s wallet in more ways than just one. Some of these costs include paying overtime to existing workers, conducting interviews with prospective job candidates, lost productivity, lower morale throughout the workplace, training candidates, employee background checks, and remuneration packages. But just how much exactly does it cost to replace a worker?
According to a recent study conducted by the Center For American Progress, the cost of replacing a worker earning less than $50,000 per year is 20% his or her annual. If a worker earning $40,000 per year left his or her current place of employment in search of a better career, for instance, the employer can expect to pay around $8,000 to recruit a replacement.
The cost of replacing a worker earning under $30,000 per year is slightly less, at 16%. However, that can add up quickly, especially when several workers choose to quit at or around the same time.
Common Causes of a High Turnover Rate:
- Lack of recognition/appreciation from the employer.
- Dissatisfaction with management.
- Lack of career opportunities.
- Unrealistic expectations of the job and its responsibilities.
- Workplace bullying.
- Forced overtime and/or poor scheduling.
- Low salary.
Employees quit their jobs for a number of different, as listed above. It’s a common assumption that low pay is the prime reason why employees give their 2-week notice, but several studies show a different reason: lack of recognition. When a worker isn’t being recognized by his or her peers, there’s a greater chance of them quitting. Thankfully, there are some simple steps employers can take to reduce their turnover rates and encourage employees to stay.
How To Reduce Turnover Rates
A low turnover rate begins with hiring the right workers. Employers should invest the necessary resources into ensuring each and every candidate is qualified for the job. This includes conducting a thorough interview as well as a employee background check. Employment Background checks can reveal some surprising information about job candidates, helping you make the tough decision of who’s the best candidate for the job.
Implementing an employee appreciation program can also prove effective in lowering a company’s turnover rates. Many companies have an employee-of-the-month program, in which they choose a single hard-working employee each month to recognize. The chosen employee may receive a pat on the back and a verbal “good job,” or they may receive some type of tangible reward like a gift card, company-branded gear, a personalized trophy, etc. These are just a few ways employers can lower their turnover rates.
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