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Four Approaches To Reducing The Cost Of Employee Turnover

Employee turnover is a simple fact of doing business. No matter what the size of your company, employee turnover is going to happen. For large corporations, employee turnover is easier to manage given the size of their HR divisions. However, for small to mid-sized companies, employee turnover can prove costly and time-consuming. In response to this challenge, Total HR Management offers four approaches to reducing employee turnover and reducing the expense of employee turnover.

Understanding the Cost of Employee Turnover

employee turnover

Is the Cost of Employee Turnover Too High?

The reasons for employee turnover are multiple. In fact, they often turn out to be a combination of involuntary or voluntary, healthy or unhealthy. Reducing employee turnover requires human resources expertise.

Such staffing experience can help reveal the causes of the problems being faced. Given the different reasons behind employee turnover and the contextual questions involved with specific industries, Total HR Management’s staffing experience has shown that these causes can vary dramatically.

Employee turnover has both a quantifiable impact as well as a qualitative effect on your company. From a quantifiable perspective, the impact includes the time it takes to rehire and train new employees. Also, let’s not discount the need to pay overtime to other employees to cover any gaps.

Moreover, the heightened potential for both workers’ compensation and unemployment claims is a real danger. From a qualitative perspective, a company should never ignore any potential damage that employee turnover can do to existing client, customer, and even vendor relationships. Also, employee turnover can have a qualitative negative impact on employee morale.

Even with the benefit of recruitment and selection support that comes with working with a PEO, employee turnover still drains time and costs money. The simple integration of a new employee into a specific job as well as your company culture as a whole takes time. As a result, your company needs practical approaches to managing employee turnover.

4 Approaches to Managing Employee Turnover

1) Reducing Employee Turnover Impact on Clients and Vendors

Beyond rehiring and training, employers need to understand how a new employee impacts key clients and vendors. Rather than ignore this challenge, Total HR Management has found that it’s better in most cases to address it directly. If possible, in-person communication tends to be the best option. If such face-to-face contact is not possible, online Skype-like meetings or personalized calls can be useful as well.

After all, when it comes to employee turnover, losing vendors and client attrition are the truly negative scenarios. By addressing this problem upfront, a potential hazard can be transformed into a favorable opportunity. Both clients and vendors respond when such information is provided promptly.

2) Understanding and Using Employee Turnover Data

Although keeping track of employee turnover data can seem burdensome, there is an answer to this problem. By working with a professional employer organization like Total HR Management, your small to mid-sized company gains access to Human Resource Information System (HRIS) platform. Operated by a certified Professional in Human Resources (PHR), such a platform can compile and produce detailed employee turnover reports on a regular basis. By understanding the latest data, you can succeed in reducing the cost to your company of employee turnover.

3) Utilizing Transparency to Maintain Company Morale

Employee turnover can have a negative impact on the atmosphere of your company’s workplace and employee morale across the board. Losing a valuable employee also means the loss of personal relationships and a part of your company’s overall team. To reduce the effect of employee turnover on company morale, Total HR believes in transparency. Employee turnover should not be treated like a dirty little secret. Instead, by being upfront about what is happening, you can reduce uncertainty among your staff.

As a company owner or managing executive, you need to provide reassurance by emphasizing the ongoing stability of the company. Above all, you want to avoid blowing up the problem into a turnover cycle. Such a cycle happens when the loss of one employee triggers the loss of multiple employees like dominoes falling. By being transparent and supportive, such a hazard can be avoided.

4) Taking Advantage of Recruitment and Selection Techniques

As an expert in effective recruitment and selection techniques, Total HR Management has learned the importance of helping our client companies get it right the first time. If you hire the right people for the job the first time, you can significantly reduce involuntary employee turnover. The key is to balance recruitment with selection techniques, so the number of job applicants leads to quality options.

Naturally, even the best recruitment and selection techniques cannot promise anything close to zero involuntary employee turnover. However, such techniques can reduce an existing employee turnover problem by finding new potential hires that are a proper fit for your small to mid-sized company. When something fits, it tends to stay in place.

Total HR Management Can Help With Employee Turnover

As a professional employer organization, Total HR Management can help your company manage the cost of employee turnover. We understand how employee turnover can negatively affect your business, and we have experiencing helping our client companies address this challenge. To learn how we can help your small to mid-sized business reduce the cost of HR challenges across the board, please call (800) 975-5128 today.

 

No Legal Advice Intended: This blog includes information about legal issues and legal questions. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.

 


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