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Breaking Down the Cost of Employee Turnover
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One of the five drivers we talk about here at Acumen Learning is people. We show it in the center of the Five drivers because they are the most important resource of any company. Successful companies usually have a history of strong employee satisfaction and longer employee tenure. There has been a lot of conversation around employee turnover since the pandemic in 2020.
In June 2021 Time Magazine wrote an article titled 'The Pandemic Revealed How Much We Hate Our Jobs, Now We Have a Chance to Reinvent Work.' Shortly after the term 'the great resignation' became the status of the job market, the disruption of the pandemic changed what people expect from work. People saw that they could expect more. This emboldened people to leave their jobs, some even changing careers. This is a good thing right? People doing things that better their life.
This change in employee attitude is costing companies a lot of money. Employee turnover is expensive. Gallup estimations put the cost of turnover between 50% and 200% of that employee's salary.
According to University of Minnesota Human Resource Management Group, an employee who is paid $8 per hour can cost a company upwards of $4,000 to replace. This may not sound too bad. But a 100 person organization that provides an average salary of $50,000, could have turnover and replacement costs of $660,000 to 2.6 million per year. And this is using the turnover rate of 26% which is what it was in 2017. The percentage is almost 33% for 2021 according to the Bureau of Labor Statistics.
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#businessacumen #businessstrategy #learninganddevelopment #leadershipdevelopment #financetraining #businesstraining #financialstrategy #financialacumen #employeeturnover #moneysavings #people
In June 2021 Time Magazine wrote an article titled 'The Pandemic Revealed How Much We Hate Our Jobs, Now We Have a Chance to Reinvent Work.' Shortly after the term 'the great resignation' became the status of the job market, the disruption of the pandemic changed what people expect from work. People saw that they could expect more. This emboldened people to leave their jobs, some even changing careers. This is a good thing right? People doing things that better their life.
This change in employee attitude is costing companies a lot of money. Employee turnover is expensive. Gallup estimations put the cost of turnover between 50% and 200% of that employee's salary.
According to University of Minnesota Human Resource Management Group, an employee who is paid $8 per hour can cost a company upwards of $4,000 to replace. This may not sound too bad. But a 100 person organization that provides an average salary of $50,000, could have turnover and replacement costs of $660,000 to 2.6 million per year. And this is using the turnover rate of 26% which is what it was in 2017. The percentage is almost 33% for 2021 according to the Bureau of Labor Statistics.
Follow Acumen Learning
Follow Julie Rasmussen
✅ Subscribe to our YouTube Channel for more Business Acumen videos!
#businessacumen #businessstrategy #learninganddevelopment #leadershipdevelopment #financetraining #businesstraining #financialstrategy #financialacumen #employeeturnover #moneysavings #people