Employee Turnover Costs More Than You Think!

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Employee retention is one of the biggest challenges HR professionals face today. Discover the high costs of employee turnover and how you can improve your retention rates with better onboarding.

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Employee Turnover Costs More Than You Think!

  1. 1. Improve Retention With Better Onboarding Employee Turnover Costs More Than You Think
  2. 2. Employee Turnover Costs More Than You Think 2 The Problem Employee turnover costs money. A lot of money. Money that you can’t afford to lose. Just how much money are we talking about? Check out these statistics: Some studies predict that every time a company replaces a salaried employee, it costs 6 to 9 months’ salary on aver- age. For a manager making $40,000 a year, that’s $20,000 to $30,000 in recruiting and training expenses. But others predict the cost is even more and that losing a salaried employee can cost as much as 2x their annual salary, especially for a high earner or executive-level employee. Source:http://www.zanebenefits.com/blog/bid/312123/Employee-Retention-The-Real-Cost-of-Losing-an-Employee
  3. 3. Employee Turnover Costs More Than You Think 3 These large numbers make sense when you break down the actual total costs of losing an employee. These costs include the following: Source: http://www.linkedin.com/today/post/article/20130816200159-131079-employee-retention-now-a-big-issue-why-the-tide-has-turned • Customer service and errors: (given the assumption that new employees take longer and are often less adept at solving probl- ems). • Training: Over 2-3 years you likely invest 10-20% of an em- ployee’s salary or more in train- ing. • Cultural impact: Whenever someone leaves, others take time to ask “why?” • Hiring a new person: Factor in the costs of advertising, interview- ing, screening, hiring, etc. • Onboarding a new person: Cal- culate the costs of training, mana- gement time, meetings with other coworkers, etc. • Lost productivity (if the new per- son takes 1-2 years to reach the productivity of an existing person) • Lost engagement: Other employ- ees who see high turnover disen- gage and lose productivity.
  4. 4. Employee Turnover Costs More Than You Think 4 A Balancing Act Praised for its physical benefits, like toning and working out your core muscles, paddle boarding is probably harder than it looks. You get to kneel or stand on an object that’s basically a big, wobbly surfboard and then try to keep your balance while you push yourself forward with a paddle the length of an oar. The first hurdle is just getting on board. Once on board, the only way to remain steady and not fall off is to keep your balance with unsteady equipment. Unfortunately, too many companies have onboard- ing/orientation programs that are a lot like paddle boarding: difficult and unstable.
  5. 5. Employee Turnover Costs More Than You Think 5 Direct Impact Getting “on board” is a difficult balancing act whether or not you’re standing on a surfboard. Onboarding, the formal business process of orienting new hires to an organization and giving them the necessary knowledge to be pro- ductive and effective, is one of the primary keys of employee retention. A report published by the Aberdeen Group (On- boarding Benchmark Report: Technology Driv- ers Help Improve the New Hire Experience) says that although onboarding has evolved into more of an integrated experience than simply a checklist, many more companies need to enhance this process. And why is that? Because your orientation procedures directly impact your employees’ desire to stay. Effective onboarding is one of the primary keys of employee retention.
  6. 6. Employee Turnover Costs More Than You Think 6 “Although 90% of companies believe that their employees make their decision to stay at the company within the first 6 months, many of these companies do not recognize or acknowledge how onboarding impacts retention rates and time to productivity. Instead, they rely on paper-based solutions that create added costs and often leave a bad first impression that negatively affects the company brand. Thirty-six percent of companies still do not use any technology for their onboard- ing solution.” ~ Aberdeen Report
  7. 7. Employee Turnover Costs More Than You Think 7 In other words, once hired and “on board,” many em- ployees are still left to balance unsteadily in their new jobs. The transition from recruitment to becoming an established employee is often as insecure as standing on a wobbly surfboard in the ocean. Most employees won’t want to balance there for long.
  8. 8. Employee Turnover Costs More Than You Think 8 The Challenge New hires quitting is not a new problem. A recent survey by the Society for Hu- man Resource Management says that one of the top three challenges fac- ing HR professionals in the next ten years is retaining and rewarding the best employees. This means that if a company’s onboarding process is indeed a key factor in retention, more companies and HR professionals must examine their current internal communication practices and improve them if necessary. The Aberdeen Report also points out that, “how effective a company is at its onboarding process determines how successful that company is at retaining its employees, yet many companies do not recognize this connection.”
  9. 9. Employee Turnover Costs More Than You Think 9 Applying Solutions Because acclimation and engagement are key factors in employee retention, on- boarding needs to be clear, proactive, and engaging. According to the Aberdeen Report, companies who recognize this are improving the new-hire experience by doing the following: • eliminating paper-based processes and spreadsheet procedures • researching and investing in technology
  10. 10. Employee Turnover Costs More Than You Think 10 Researching and investing in technology to enable their new hires to have a smoother transition from the recruitment stages. Why? Because automated solutions can help companies address pressures to improve retention rates, improve time to produc- tivity, and improve the company brand. Eliminating paper-based and spreadsheet procedures and con- sidering web-based technology solutions. These tools propel companies toward reducing costs and staff turnover and creat- ing faster start times. Companies that are serious about improving their onboarding programs are doing the following:
  11. 11. Employee Turnover Costs More Than You Think 11 Check out the next section for 5 onboarding best practice tips.
  12. 12. Employee Turnover Costs More Than You Think 12 As soon as the candidate accepts the position, start sending multimedia materials, such as welcome messages from the leadership team, to get your new hires excited about their new job. Source: http://www.workforce.com/articles/19977-onboarding-tips-and-best-practices-for-bringing-new-workers-on-board) 1 Onboarding Best Practice Tips
  13. 13. Employee Turnover Costs More Than You Think 13 Adopt electronic solutions that automate the completion of forms both before a candidate starts and on their first day to reduce ineffi- ciency, costs, and extra time associated with paper-based form completion. Source: http://www.hreonline.com/pdfs/10022007Extra_AberdeenReport.pdf 2 Onboarding Best Practice Tips
  14. 14. Employee Turnover Costs More Than You Think 14 Create new-hire portals and social networks for new employees to learn about company culture, complete trainings, and socialize/ connect with other coworkers to make new friends. These portals should basically provide anything a new employee would need to more productive and engaged. Source: http://www.workforce.com/articles/19977-onboarding-tips-and-best-practices-for-bringing-new-workers-on-board 3 Onboarding Best Practice Tips
  15. 15. Employee Turnover Costs More Than You Think 15 Keep track of a new hire’s progress using task management tools. A number of these tools also provide automatic reminders when em- ployees fail to progress with their onboarding tasks at the desired pace. Source: http://www.workforce.com/articles/19977-onboarding-tips-and-best-practices-for-bringing-new-workers-on-board 4 Onboarding Best Practice Tips
  16. 16. Employee Turnover Costs More Than You Think 16 Trust your employees to “serve themselves” using their own technological capabilities. “Self-service HR has become so invaluable that a September 2006 Forrester Research re- port termed it ‘an essential core application’ for businesses.” Self-service HR has the added benefit of freeing up time for HR managers to concentrate on more pressing issues. Source: http://www.allthingsworkplace.com/2010/03/overcoming-top-myths-in-hr.html 5 Onboarding Best Practice Tips
  17. 17. Employee Turnover Costs More Than You Think 17 So what’s the bottom line?
  18. 18. Employee Turnover Costs More Than You Think 18 Employee turnover costs more than you think. Improve your retention rates with better onboarding!
  19. 19. Employee Turnover Costs More Than You Think 19 Ving is an engagement tool that en- sures your most important messages are understood and acted on. With Ving, you create and share multi- media messages that capture real-time recipient interactions viewable on your engagement dashboard. Businesses and organizations use this dynamic communication tool to: ►► Streamline onboarding procedures ►► Communicate policy updates ►► Increase employee engagement ►► Enhance compliance training ►► Improve management communications Get started now. Just $5 a month! Click here

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