Employee Turnover Costs4
Employee Retention Strategies5
The goal of this study is to understand employee turnover and its cost, employee retention and what are some Canadian company’s retention strategies to reduce high employee turnover rates. Analysis
Employee turnover is a ratio comparison of the number of employees a company must replace in a given time period to the average number of total employees. A huge concern to most companies, employee turnover is a costly expense especially in lower paying job roles, for which the employee turnover rate is highest (Beam, 2010). Most associates’ average employment time with them is 7 years. Some of the common reasons why employees leave their company includes employee decided to do contract work instead of fulltime, moving out of province or employee feel that their company or position is just not a good fit (Devernichuk, 2010). Employee Turnover Costs
Employee turnover is a very expensive and time consuming. There are several direct cost associated with employee turnover in the company. This includes: * Separation Costs. Cost incurred for exit interview, separation/severance pay, administrative expenses, or any increase in unemployment compensation. * Replacement Costs. Cost in advertising the position vacant, entrance interviews, testing, travel/moving expenses, pre-employment administrative expenses, medical exams and acquisition and dissemination of information. * Vacancy Costs. Cost due to increased overtime or temporary employee who fill-in the vacant position. * Training Cost. Time and resources spent in training the new employee and loss of productivity while new employee is on training. “Studies have estimated direct turnover costs per employee to be 25-30% of an individual employee’s...