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The Cost of High Churn

August 18, 2022

A small leak can sink a giant ship. The same concept can apply to a company that loses a number of employees. A company will lose several talents and skills, forcing a restart of the business operation.

A high turnover means a position is frequently vacant. If several positions have high turnover, it is detrimental to the company’s reputation because it can suggest a problem with the employee engagement or the leadership team.

A churn of employees costs a tremendous amount of money.

According to Workstars companies will spend an estimated $40,000 to entirely replace an employee, including advertising, recruitment fees, training time needed to get new personnel to full working capacity, and skipped productivity. If you think about the cost of turnover, it’s about 6-9 months to replace them.

Example: If an employee is making $70,000 a year, that’s $35,000 to $50,000 to replace them if we consider all of the costs involved with replacing someone. All aspects of recruiting and training expenses.

The great resignation has shed a lot of light on what it means to balance employee engagement. People have taken the last 24+ months to analyze their work-life balance and decide on what is truly important to them. It is crucial to act on the ground and uncover the triggers of high turnover.

Toxicity in the Workplace

Employees don’t quit their jobs or a company; they leave toxic environments, poor management, and a non-proactive workplace. They want to feel valued.

Tribe-vibe, micromanagement, belittling, and criticizing are all examples of toxic behaviors that lead to toxic environments. Without actively involved leadership, these actions are perpetuate due to their lack of action. These toxic environments feed on your motivation until you perceive the job as a punishment.

Nothing is more frustrating than working at a company that you like but seem to get lost in internal toxicity, deflection, and egos. It creates an unnecessary high-stress environment that will ultimately be riddled with errors, work that is less than par, and, yes, high turnover.

Major indicators to look for. There are four common symptoms of a high turnover. Unfortunately, these have remained under the radar for a long time, and they have been infecting the company’s ecosystem by being wrongfully perceived as a normal part of the business operation.

  1. Inadequate Technology: When an employee takes 4x longer to accomplish a basic task due to a lack of proper materials, expecting them to work faster or not make mistakes becomes unreasonable. Doing the manual workaround will only increase the chance of human error. What’s even worse is easy tasks become incredibly challenging to complete. A leadership team who continues to ignore outdated technology will face the consequences of replacing employees eventually. Besides, who would want to stay in an organization where their effort is tripled due to inadequate tools?

  2. Cumbersome Process: Inefficiency causes frustration. A clear image of this is when an employee needs to seek approval from four people coming from different areas of the business. Although the point of the procedure is to intricately verify the necessary details, are all those approvals needed? Employees don’t love the idea of doing a procedure that does not make any sense to them. The cumbersome process is a delay in disguise. It is irrelevant in such a way that it consumes time through a period of waiting on which much could have been accomplished if processes were simplified or redesigned.

  3. Behavior Amongst Employees: An employee replicates their actions based on evident behavior in his working environment. When employees are undervalued, they show a decline in interest and effort. It’s a domino effect; the vibe they feel in the workplace is directly proportional to how they perform their respective roles. Not everything is about money. Employees are often looking for a space where they don’t have to give off a fight with inconsiderate superiors.

  4. Unsatisfied Customers: Customers expect a seamless service, but when their expectations aren’t met, employees will have to act as the last point of contact for that person and absorb the stress and heat of emotions coming from a dissatisfied client. Employees will have to work on taming the customer’s emotions due to not receiving the correct service. Such a scene could be highly stressful, especially when the personnel is dealing with the situation on a daily basis. It’s a fact that the right tools work beyond human capacity; they serve as a channel for employees to perform their job with utmost efficiency.

Company leaders need to pay attention to the current work environment. High turnover can’t be solved with a quick fix, so when the symptoms are identified, consider asking for professional help.