The Astrix Blog
Expert news and insights for scientific & technology professionals.
The Life Science Industry Blog for R&D Professionals
The High Cost of Employee Turnover and How to Fix It
Employee turnover is a significant problem for businesses across the globe. Not only is it costly to replace employees who leave, but it can also lead to a decline in morale among those who stay.
In fact, according to the Society for Human Resource Management (SHRM, it can take 6 to 9 months of an employee’s salary on average to replace him or her. If an employee makes $80,000 on average, it will cost anywhere from $40,000 to $60,000 in recruitment and hiring costs to replace the employee.
If you’re losing good employees on a regular basis, it’s time to take a closer look at your turnover rate and find out what’s causing the problem.
What is employee turnover rate?
The first step to reducing your employee turnover rate is understanding what it is and why it’s important. The employee turnover rate is the percentage of employees who leave an organization within a specific time frame. This metric is important for companies because it can give insight into the organization’s health, employee morale, and overall retention rates.
Why employee turnover matters
There are a number of reasons why employee turnover matters:
- It is expensive to replace employees. As noted above, it can take 6 to 9 months of an employee’s salary on average to replace him or her.
- Employee turnover can impact morale. When employees see that their colleagues are leaving, they may become disengaged and discouraged.
- Loss of key skills and talents. When high-performing employees leave, it can have a negative impact on the company. The loss of key skills and talents can make it difficult to complete work and meet deadlines.
- Employee turnover can impact the overall retention rate of the organization. If the turnover rate is high, it may be difficult for the organization to attract and retain top talent.
How to calculate your turnover rate
You can calculate your employee turnover rate by dividing the number of employees who left the company in a given time period by the average number of employees during that time period. For example, if 10 employees left your company in January and you had an average workforce of 100 employees during that month, your employee turnover rate would be 10%.
Turnover Rate = (Total Departures ÷ Average Number of Employees) x 100
Look for trends in your data
Once you have calculated your employee turnover rate, you should look for any patterns or trends in the data. Are there certain departments or job positions with higher rates of turnover? Are there certain times of year when more employees tend to leave? By identifying any trends in your data, you can target your efforts to reduce employee turnover where they are most needed.
Find out why employees are leaving
Once you have identified any trends in your data, you should try to find out why employees are leaving those departments or positions. It’s important to try to identify any patterns in order to address the root cause of the issue. Some common reasons for turnover include:
- Job dissatisfaction: If employees are unhappy with their job, they may be more likely to leave. This can be caused by a number of factors, such as a poor work-life balance, low pay, or a lack of challenges.
- Poor management: Employees may leave if they feel that their managers are not supportive or if they are not given the opportunity to grow and develop in their role.
- Lack of company culture: If employees don’t feel like they fit in with the company culture, they may be more likely to look for a job elsewhere.
- Location: If an employee needs to relocate for personal or family reasons, he or she may decide to leave the company.
What can you do to reduce turnover rates?
The first step is to identify the root cause or causes of the issue. Once you know what’s causing your employees to leave, you can take steps to address the problem. For example, if employees are leaving because they’re unhappy with their jobs, consider implementing a system whereby employees can provide feedback about their roles and suggest ways to make them more enjoyable. If compensation is an issue, conduct salary surveys to ensure that your employees are being paid competitively. Lastly, if your workplace culture needs improvement, focus on creating a positive environment where employees feel supported and valued.
Some steps that companies can take include:
- Conducting regular interviews with employees to get feedback on their job satisfaction and what could be improved
- Providing opportunities for career development through training and mentorship programs
- Encouraging communication and collaboration among employees
- Reviewing compensation and benefits packages regularly to ensure they are competitive
- Maintaining a clean and safe physical work environment
Employee turnover is a costly problem for businesses, but it is possible to lower your employee turnover rate with careful planning and execution. By tracking your employee turnover rate, looking for trends in the data, finding out why employees are leaving, and implementing retention strategies, you can keep more of your best talent at your company and reduce the cost of recruiting and training new employees.
Bonus Insights for Life Science Employers
The employee turnover rate is 20.6% in the life sciences, which is higher than the overall average rate of 13%. The high turnover rate may be due to the fact that there are a number of jobs in the life sciences that are in high demand. As a result, employees may feel that they can find a better job elsewhere with ease. Additionally, the fast-paced nature of the industry may contribute to a higher turnover rate as employees feel burned out or stressed.
Employee turnover is a costly problem for life science companies. However, there are ways to mitigate the cost of high turnover rates. One way to do this is by utilizing staffing services. Staffing provides a number of benefits including reducing costs, improving retention rates, and providing a stable workforce that is properly trained and motivated. If you’re looking for ways to improve your company’s employee turnover rate, consider working with a staffing agency that specializes in the life sciences industry.
Astrix is the unrivaled market leader in creating and delivering innovative strategies, solutions, and people to the life science community. Through world-class people, processes, and technology, we work with clients to fundamentally improve business and scientific outcomes and the quality of life everywhere.
Founded by scientists to solve the unique challenges of the life science community, Astrix offers a growing array of strategic, technical, and staffing services designed to deliver value to clients across their organizations.
Contact us today to learn more about our services!