There could be as much as US$1 trillion missing from your operating income because of employee turnover.
Replacing an employee is an expensive process—costing anywhere from one-half to two times that person’s annual salary—but it’s not necessarily the expense per employee that’s the problem: it’s the amount of people leaving their jobs.
While it’s normal for employees to move on once their potential at an organisation has been exhausted, many multi-billion dollar global industries are struggling with staff churn rates of up to a whopping 90%. If you’re losing this many employees, you are also likely to be losing large sums from the company purse.
StaffConnect is an employee engagement specialist. We’ve got the full breakdown of how the global staff turnover crisis could be hitting your organisation—and what you can do about it.
What is behind the crisis?
Employees don’t just leave in droves for no reason. Staff turnover rates are a symptom of a much wider problem: employee disengagement.
In the simplest terms, disengaged employees are those that don’t feel a strong connection to their role within your organisation. They show up to work, do the bare minimum required to slip under the radar and are likely to leave as soon as a better opportunity arises. This leads to a massive loss of productivity, higher rates of absenteeism and, of course, staff churn.
Shockingly, Gallup estimates that 85% of the global workforce is disengaged. In fact, a higher percentage of people are thought to be ‘actively disengaged’—or hostile towards your organisation—than are engaged.
Failure to reach out and create a culture of engagement across your entire workforce could be sending valuable members of staff straight of the door: engaged are 87% less likely to leave their jobs for another company.
How much is it costing?
Calculating the cost of staff turnover is a tricky business. There are many variables involved, including:
- The country
- The size of your organisation
- The employee’s salary
The general rule of thumb is that it will cost at least one half of an individual’s annual salary to replace them, but Gallup puts it even higher, going as far to say that its ‘one-half to two times’ estimate is a conservative one. These figures take into account:
- Exit interviews
- Severance pay
- Unemployment taxes
- Increased overtime from colleagues
- Recruitment costs
- On-boarding and training
Which industries are most at risk?
Of course, some industries are at a greater risk of disengagement-linked employee turnover than others. Those that rely heavily on deskless workers—including hospitality, retail, manufacturing, healthcare, logistics and more—often report the highest rates of both disengagement and staff churn.
This is because the majority of enterprise organisations primarily use desktop systems to communicate with their workforce. Our research found that:
- 71% of these organisations rely on email
- 53% on staff intranets
- 48.5% on newsletters; and
- 20.6% on print/mailers.
With limited or no access at all to these platforms, deskless workers are left out of the corporate communications loop and unwittingly excluded from the company culture.
How do I address the staff turnover crisis?
To address the symptom, you have to address the root cause. It’s not possible to convince employees to stick it out at your company without making employee engagement a priority.
Fixing the staff turnover crisis in your organisation isn’t about doing just one thing: it’s about fundamentally changing how you interact with your workforce. That may seem daunting, but we believe there are three pillars that your new-and-improved communication and engagement model should be built around:
- Go mobile: Switching to a mobile-first model is an instant win for employee engagement. In a digital age, it’s the only fair way to communicate with your workforce and ensure that in-office and deskless staff have equal access to everything they need.
- Ask for help: You need to figure out where your organisation is going wrong, but you’e not a mind reader. That doesn’t mean that your employees are going to volunteer their opinions about their engagement levels. It’s up to you to reach out and request feedback on how people are feeling at work.
- Reward strong performance: Craving recognition isn’t just about vanity. People inherently want to feel is valued, particularly if they’re putting considerable effort into meeting targets. Having mechanisms in place for showing staff they’re appreciated will help you retain your hardest workers and motivate those that are slacking.
StaffConnect is one of the world’s leading mobile employee engagement platforms that can help you alleviate the staff turnover crisis. Our app-based system, which has a desktop admin console for office workers and senior management, has been designed to unite the workforce and build a strong company culture.
We have helped countless clients across high-risk sectors such as hospitality, retail, manufacturing and healthcare transform the relationship between the organisation and its employees for a brighter, more cost-effective and profitable future. Discover some of our case studies to find out more about the transformative power of StaffConnect.