Churn costs companies an average of over $41,000 each year: survey
Employee turnover is becoming an increasingly costly problem that continues to plague Canadian employers, according to a survey from The Harris Poll commissioned by Express Employment Professionals of 504 hiring decision-makers in May.
More than one in three (35 per cent) say turnover has increased compared to last year — a significant rise from the one in four (24 per cent) who said the same thing in 2021.
It’s no surprise workers are willing to jump for better opportunities, says Express Employment International CEO Bill Stoller.
“A well-rounded workforce is one that stays,” he said. “The goal of any employer should be to create such a healthy company culture that top talent will turn down other job offers. It may just be the key to stopping future turnover.”
Is higher pay the answer to employee turnover?
Why are people leaving?
So, what’s the biggest reason for people leaving? Compensation comes out on top.
- better pay or benefits offered elsewhere (36 per cent)
- employees resigning (35 per cent)
- employees feeling overworked (33 per cent)
- retirements (30 per cent)
- increased workplace demands (29 per cent)
- better perks elsewhere such as summer Fridays and unlimited vacation days (28 per cent).
There’s a host of retention strategies that employers should be aware of, but retention really starts at the point of recruitment, says John MacKinlay, CEO of Caary Capital.
‘Devastating’ costs
This churn costs companies an average of over $41,000 each year (including the cost to rehire, lost productivity and more), according to the Express Employment survey. But one in 10 hiring managers (16 per cent) say the cost can run as high as $100,000 or more per year.
Two-thirds of companies agree that employee turnover places a heavy burden on existing employees (64 per cent). This is especially the case with large employers with 100 or more employees (75 per cent) compared to small businesses with fewer than 10 employees (50 per cent).
“The costs of employee turnover can be absolutely devastating,” says Brent Pollington, an Express franchise owner in Vancouver.
“Companies have been innovating and adapting, but job seekers keep increasing their demands. Businesses are more willing to hire for aptitude and motivation and then train for skill and knowledge but, as a result, the learning curve is great and longer tenure is required for the business to see a return.”