To Avoid the Extraordinary Costs of Turnover, Employee Engagement is Critical.
Employee engagement is a key factor for success because it is clear that people create business value. Need convincing? Consider that “a software company with 1,000 employees and few physical assets can be worth billions of dollars.”
If you accept that people create business value, you need to keep you employees happy. In recently talking to Human Talent experts about why people change jobs, they suggest that salary is important, but not always the primary driver. It turns out that employee engagement is a critical driver in avoiding high turnover. We know that low employee engagement negatively impacts profitability, but another critical cost is employee turnover. Studies show that employees with lower engagement are four times more likely to leave their jobs, and highly engaged employees are 87% less likely to leave their companies.
If your team is working in what they consider to be a nurturing workplace where they are recognized, valued and happy, it will take more than a higher salary to get them change companies. And if they leave, replacing them is costly. According to William G. Bliss, author of Leadership Lessons From THE BOOK, the cost can easily reach 150% of the employee’s annual compensation figure, and even higher for managerial and sales positions. He writes
“To put this into perspective, let’s assume the average salary of employees in a given company is $50,000 per year. Taking the cost of turnover at 150% of salary, the expense would then be $75,000 per departing employee. For the mid-sized company of 1,000 employees that has a 10% annual rate of turnover, the annual total is $7.5 million!”
Is Your Company Actively Engaging Your Team?
The current trend in the US is that employee engagement is dropping. Is your company actively engaging its team to ensure employee engagement is in good shape? It is important that leadership develops the right tools to help measure the team’s current state of emotions and feelings and that programs are developed to raise engagement and create a desirable work culture.
The Aon Hewitt 2017 Trends in Global Employee Engagement study found that Reward & Recognition programs were the top engagement drivers.
Raises across the board helps to keep your people, but that is also a long-term fixed cost that will not solve the problem of a disengaged workforce.
Solutions to Help You Succeed
At Invested Traveler we have developed the Journey Model of Workforce Engagement to specifically address the problem of falling employee engagement. For a one-time cost of less than replacing one unhappy employee, Invested Traveler offers incentive travel programs that reward and recognizes your top performers. Not only that, our programs are designed to raise the engagement levels of ALL your employees, increasing your company’s overall productivity and lowering turnover.