One of the main benefits of reducing employee turnover is that you won’t have to hire new employees to replace the ones who leave. Hiring new employees is often one of the largest expenses a company could possibly face. In the first place, you have to recruit them. At the very least, that’s going to require some advertising expenditures. More often in today’s job market, it’s going to require job board posting or agency fees. Given all of the costs associated with hiring new employees, the less often you have to do it, the better off you’re going to be.
Worse yet, the costs associated with hiring new employees don’t stop getting racked up on the day they start the job, either. First, you have to train them. Depending on the nature of the position, that could take months. Since it takes so long, it’s going to be very expensive. Plus, once they’re trained, it could still take a very long time to get them up to speed. If they’re replacing someone with years of experience in the position, it could take a very long time indeed for them to become as proficient as they person they replaced. In the meantime, your customers could suffer a reduction in the quality of service they receive from your company, which could have a negative impact on your brand.
Also, employee turnover results in additional recruiting expenses even beyond advertising and training. After all that advertising has gone out, before that new batch of employees can be trained, they have to be screened in a number of different ways. Resumes need to be reviewed, applicants need to be interviewed, and inquiries need to be responded to. All of these tasks require man-hours from your HR department, and since a company’s payroll is often already its biggest expense anyway, if you add these costs to the ones we’ve already discussed, you can see that that totals can quickly become astronomical.
Since those costs are so high, it is obvious that any steps taken to reduce this kind of turnover are going to have an impact on the bottom line for your company. One of the most important steps you can take to reduce turnover is to hire the right employees for the right positions to begin with. Fortunately, assessment tests have been designed to help you do just that, as have other tools to help you improve employee retention even further.