Employee Perks Can Help Reduce Employee Turnover
The cost of losing employees and replacing them can be expensive - so how much can that be? Well, according to Inc.com, most estimates run as high as 150% of an annual salary. This varies by industry and position level, but what it tell us is that there is a significant impact to a company’s bottom line when employee turnover is not controlled.
How does this translate to real costs? Well, let’s look at an example. Assume an average salary for employees in an example company is $25,000 per year. If you take the cost of turnover at 150% of salary, then the cost of turnover is $37,500 per employee who exits the company. For a small to a mid-sized company of 100 employees with a 10% annual rate of turnover, the annual cost of turnover is $375,000!
Small, medium or large companies, the cost of turnover can be a significant hit to a company’s bottom line.
So what calculations are taken into account in order to arrive at the 150% turnover cost?
- Lost productivity costs
- Overworked remaining staff costs
- Lost knowledge costs
- Training costs
- Interviewing costs
- Recruitment costs
Knowing how much it costs to replace employees and, the financial impact turnover has on an organization's bottom line, offering employee perks is a logical way to reduce turnover. What Staff Privileges has done is to make it affordable and easy.