It's no secret that employee turnover can be a costly situation for many businesses. Naturally, you'll need to get a new person up to speed with your software, systems, and processes. It is a reasonable expectation to assume new employees will perform their job functions less efficiently than their predecessors in the beginning. A few years ago, the Center for American Progress reported the costs of turnover for employees who make <$75,000 averaging between 10 and 30 percent and up to in excess of 120 percent in some cases. Translated into time, this means turnover costs could equate to as many as 15 months before the new hire is fully capable of doing his or her job efficiently and in a cost-effective manner.
So, what's the mystery behind these expensive numbers?
As LinkedIn influencer Josh Bersin states, "Many studies show that the total cost of losing an employee can range from tens of thousands of dollars to 1.5-2X annual salary." Within those numbers, there are hard costs, such as recruiting and advertising expenses, and there are soft costs that are harder to calculate. The latter of which can include anything from decreased employee engagement and morale to lost knowledge that leaves with the exiting employee.
If the training structure in your organization is poor, your turnover costs will likely be even worse. Business process management (BPM) systems close the gaps and minimize turnover expenses, but only if you have proper systems in place.
The following are some common places where turnover costs can cause greater-than-expected expenses:
When an employee leaves, you really don't know what you don't know. The less standardized your internal processes are, the less likely you'll be able to hit the ground running when someone new steps in. BPM systems alleviate these situations, allowing you to know exactly where the exiting employee left off. With this hurdle overcome, the rest of the onboarding and training process will go more smoothly, reducing your overall turnover costs.
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