Do your employees stay or do they go?
Retaining skilled employees is important for a business because a high rate of employee turnover results in a loss of knowledge and skills. The financial cost of losing an employee includes both lost productivity and recruitment effort. You will have made a significant investment (both time and money) in attracting, recruiting, inducting, training and developing your employees. This effort will need to be replicated to replace the lost worker.
You can use the
Workforce turnover and analysis template to help you calculate your turnover rate and the associated cost.
Why employees stay
Understanding why employees choose to stay in your business may help you reduce staff turnover. Often the reasons that employees remain are the same reasons that first attracted them to your business. Some of the factors that influence people to stay in a business are detailed in the
Employee retention table.
Why employees leave
The following is a summary of factors that may influence an employee’s decision to leave their job:
issues with immediate supervisors (personality differences); and
limited work-life balance.
If you’d like to know what your employees think about their workplace, use the
Employee feedback survey template and do a survey of your employees. This will give you a good indication of the things that are working well in your workplace and aspects that you may need to improve on.
Research indicates that the cost of replacing an employee is around 1.5 times their annual salary.
(Stretton, rR2000, ‘Mind the Gap’, HR Monthly, Australian Human Resource Institute October, Pg. 54-55)