Experts can talk about the overall cost of turnover until we are blue in the face, but the reality is turnover costs vary by wage and role of employee. For example, a CAP study found average costs to replace an employee are:
- 20 percent of an annual salary for midrange positions earning $30,000 to $50,000 a year. For example, the cost to replace a manager earning $40,000 per year would be $8,000.
- Up to 213 percent of an annual salary for highly-educated executive positions. For example, the cost to replace a CEO earning $100,000 is $213,000.
Know Your Unique Cost of Turnover
Even with those validated guidelines, it’s important to remember only you can calculate your true cost of turnover, which is why we want to share this Turnover Cost Calculator that will guide you through that process. Simply download the file (that is pre-populated with an example) and complete it with your unique numbers. No fluff. Numbers don’t lie.
3 Ways Leaders Can Prevent Turnover
Now that you have a solid business case to focus time and resources on reducing turnover, let’s take a look at how you can prevent it. While this list is not exhausting, 2020 is, so let’s just keep it simple and immediately actionable, okay?
Be sure to infuse the culture into all aspects of your processes from communication to training, recognition, coaching and counseling. Be sure your new team member remembers why they joined your company and how much their values align with the organization’s.
Provide ample training, even if it slows you down temporarily. When team members have the knowledge to perform their job without constantly needing direction, they are more likely to feel engaged, which reduces turnover risk. They also consider the training and professional development a value-add to their own career growth, so generously providing training from skill-specific to leadership training and beyond is a sure fire way to keep your team happy. One easy way to do that is to enroll your team member in Velvet Machete® Leadership Academy, my 8-week, live, leadership certification program.
Be clear about short-term and long-term goals so there is a shared understanding of expectations and how each team member fits into the company’s larger goals. When an individual knows how their gifts, talents and experience contribute to something greater than themselves, they are more inspired to contribute discretionary effort, while committing to the long haul.
More Resources to Help You Prevent Turnover
Here are a few episodes from the Bombshell Business Podcast that might help you dive deeper into how to prevent turnover as a leader.
How to Keep Your Employees Passionate
How to Increase Your Employee Engagement and Win at Business
5 Steps to Onboarding and Training a New Employee
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