Written by Kara Deyermenjian
May 21, 2018
There’s always a slew of numbers floating around the internet claiming to represent the amount of money organizations lose when one of their employees quits. While there is no doubt high turnover is extremely pricey, the actual money lost is going to vary depending on data points unique to your organization.\
Here are some steps you can take towards identifying the real cost of turnover in your organization:
It helps to have all the facts before drawing conclusions, so assembling a team to gather all the data you’ll need to calculate turnover cost is a good place to start. Members of the finance team, the HR department, operational coordinators, and team leaders in the organization who are the most concerned about profitability, are often most focused on metrics and key indicators and are all valuable when looking to gather this type of information.
Questions to pose to this group include:
Now that you have your data, the next step is to interpret it. Select a benchmark position to use for verifying the results.
When dealing with busy executives and those outside of the HR arena, rely upon visual analytics to tell your story quickly. This can help HR gain a seat at the table when it comes to decision making around budgeting and programs to enhance employee engagement and retention.
Helpful visualizations include:
Remember, in addition to hard costs that are more tangible and easy to identify, soft costs associated with attrition and transition are not insignificant. If open roles are not filled in a reasonable timeframe, the burden incurred across a department can result in even more attrition. In a market with less than 4% unemployment, it’s best to invest in solutions that help you analyze data proactively and can alert you or a manager in your organization in advance of a flight risk, salary discrepancy, and other alignment issues.
Download our white paper to further understand how organizations across the country are using market data, internal analytics, and strategic communication to establish an equitable pay structure.