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Why Employee Turnover Is Costing You

December 8, 2021, by New City Insurance

employed hold cardboard box and laptop bag dossier and drawing tube in boxEmployees are more likely to leave their job in today’s economy than ever before. According to data released by the U.S. Bureau of Labor Statistics, 4.3 million Americans quit their jobs in August 2021. This record-breaking number accounts for the highest percentage ever reported by the BLS Job Openings and Labor Turnover Survey.

Millennials, in particular, are open to new opportunities that may arise in the employment landscape. A recent Gallup report revealed that 21 percent of millennials say they have changed jobs within the past year.

With high employee turnover rates affecting nearly every industry, many businesses are struggling to find new talent and minimize losses. A high rate of turnover has also impacted productivity in the workplace. Learn what causes high employee turnover and how businesses can improve retention.

What Causes Employee Turnover?

Employee turnover can have a negative impact on businesses, tarnishing the company’s reputation and leading to a lack of morale. Here are some of the most common reasons why people leave their job:

  • Lack of Progression — Employees generally want to see an upward progression in their career and when this does not happen, they may look to other companies to improve their status and income.
  • Being Overworked — When employees feel overwhelmed with responsibilities, it can cause frustration. Employees do not want to have to choose between their personal life and work life.
  • Lack of Recognition — Employees want to feel respected and that their accomplishments are being noticed. When this does not happen, it can lead to hard feelings.
  • Micromanaging – Overmanaged employees may experience frustration due to a lack of decision-making and freedom in the workplace. Micromanagement is a common cause of employee turnover.
  • Poor Employee Choice — When employers do not conduct enough research before hiring, it can lead to poor employee selection. Employees who feel over or underqualified for a position may look for work elsewhere.

How Much Does Employee Turnover Cost?

Employee turnover costs can be significant. Businesses must account for advertisements for open job positions, the time it takes to interview candidates, fees related to drug screenings and background checks, and expenses associated with administering preemployment assessment tests.

Employers spend an average of 33 percent of an employee’s annual salary to replace a single employee, according to Employee Benefits News. This means it costs approximately $10,000 to replace an employee that earns $30,000 a year, $18,000 to replace a manager making $54,000 per year and $46,000 to replace an executive earning $138,000 per year.

In addition to salaried staff, it can be expensive to replace hourly workers. According to Investopedia, an employee earning $8 per hour can cost a business approximately $3,500 when they quit. The cost of training a new employee can also be costly, resulting in an average expense of $1,886 and 47.6 hours per year training hourly employees.

What Are Some Other Consequences Of Turnover?

man holding employee turnover cardA high rate of turnover in the workplace may also have other consequences for businesses. In addition to the costs of replacing employees, employers must consider the potential damage to the business’s reputation. Companies that experience a high rate of turnover are less likely to attract top talent.

When the rate of turnover within a business is high, more pressure is placed on the remaining employees. Workers may experience burnout or resentment as they struggle to handle work from people who have left the company. High turnover can affect nearly every aspect of a business, including customer service and quality.

How Can Businesses Reduce Employee Turnover?

There are many ways that businesses can reduce employee turnover and avoid the consequences that come with a high turnover rate.

  • Hire the Right People – Ensure that new hires are experienced, understand their role clearly, and are likely to enhance the company culture.
  • Keep Benefits Current — Employees expect a fair wage and benefits. Keep compensation and employee benefits competitive.
  • Encourage Gratitude – Encourage workers to engage with one another with acts of appreciation or collaboration when the situation arises. Management should do the same for their employees when workers exhibit commendable behaviors.
  • Provide Flexibility – Modern employees know the importance of maintaining a comfortable work/life balance. Offer employees flexibility around work locations and hours.
  • Offer Growth Opportunities – Workers value growth opportunities and are more likely to remain with a company if they anticipate the ability to move up the career ladder.
  • Prioritize Company Happiness – Employee happiness is a direct indicator of job satisfaction. When businesses invest in employees, they are rewarded with greater productivity and engagement.

Call New City Insurance To Learn More

New City Insurance is an experienced benefits consulting firm that specializes in compliance, insurance, and technology services. For more information or to schedule a consultation with an employee benefits consulting firm, contact us today.

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New City Insurance
New City Insurance
5.0
Ailene Chow
Ailene Chow
23:15 26 Sep 23
We have been working with New City Insurance since 2019 at the start of our company and has not look back since. They are responsive and proactive when it comes to advise and also market analysis on what's there in the marketplace. Unfortunately insurance benefits costs has been increasing yearly with differences in the percentage of increase . The New City folks reaches out months before the impending increase takes places and help relook into options or recommendations that they see fit. We were a company of 2 to now 7 permanent staff . While we are small , this company still takes care of us well.
Carol Zhang
Carol Zhang
04:29 06 Mar 22
As a rapidly expanding national media organization, the employee benefits strategy and administration that New City has provided us during our growth has been invaluable. They have been proactive about informing us of the different benefit strategies available to us as we grow as well as managing the additional compliance laws and reporting requirements at each stage of our growth.
Claudia Villalobos
Claudia Villalobos
20:14 03 Mar 22
New City Insurance made navigating through all the health insurances super EASY. Their documents are highly informative, professional, and easy to work with. Thank you for making the process of choosing a health plan so simple. You guys are THE BEST!
Philippe Salas
Philippe Salas
17:02 22 Feb 22
I never expected to have a good time talking to an insurance salesman, but let me tell you Brendan was quite the treat. He was very helpful explaining the options and has a wonderful sense of humor. I hope to speak with him every time I call.
Jennifer Polito
Jennifer Polito
17:15 09 Feb 22
Super easy enrollment process. Fast and friendly customer service. If you are looking for an insurance company that is there for you every step of the way I highly recommend New City Insurance.
Rocky Salas
Rocky Salas
23:46 07 Jan 22
So friendly, I hope to speak to him again in all my future insurance needs.
Rocky Salas
Rocky Salas
23:38 07 Jan 22
So friendly and soft spoken. I hope to speak to him again in all my future insurance needs.
Jose Brena
Jose Brena
13:20 06 Jan 22
Eric Calciano has been extremely helpful in finding and selecting the right insurance coverage for our company. With many options out there Eric assisted us on getting a low cost provider saving more than 20% than from our competitors and providing excellent coverage for our employees.
Anastasia Beaverhousen
Anastasia Beaverhousen
17:05 28 Dec 21
Signing up for insurance was quick and easy. Felicity Sundsboe
SFCC
SFCC
22:08 29 Nov 21
Jeff Stoltey and his team provide excellent customer service. Jeff has always provided my company SFCC with straightforward options. I went to a larger insurance company only to RUN BACK to Jeff at New City Insurance. I recommend them to anyone needing insurance without hesitation.
Kevin Luby
Kevin Luby
19:13 22 Oct 21
Quick, easy & informative. We were able to secure quality insurance for our small business on a tight deadline. Thanks for the help New City.
Theresa Ruybol
Theresa Ruybol
19:30 01 Jul 21
Eric was so great with us. He was very patient and kind as we are a newer smaller organization who is growing rapidly. With that said, we had made our inquiry, he had great rapid response and mostly had to wait on me. Any request that we made and/or questions we had, he was great answering and helping us understand. Then when we were ready for all documents and to move forward, Brendan helped with getting that together and the two of them worked their magic on New City's end to notify me of what was needed, assist me in that process and confirming that all was complete and approved for the coverage. I just want to say thank you all again so much, as insurance has always been confusing to me, and you all made that process go a lot smoother.Thank you
Andrea Ordendorff
Andrea Ordendorff
21:06 07 May 21
I've been working with both Clayton and Brendan for well over a year. As the purchase of our dental practice was delayed well over 14 months they both patiently supported me and continued to make themselves available. When we were officially ready to sign up they made the whole process seamless and super easy. This team is highly knowledgeable, professional, supportive, and efficient! I can't thank them enough for everything they've done.
T W
T W
22:32 30 Aug 20
I love New City Insurance. I never had a good experience dealing with insurance brokers until I started working with Brendan. He’s awesome! He is patient with me and takes the time to answer all my questions. I’m very grateful for all his help and hard work!
Mary Jane Deyette
Mary Jane Deyette
00:57 11 May 20
Jeff Stoltey is so awesome...even thru my company had only two employees, he took the time each year to research and find the best plan for us. The only reason I am leaving New City Insurance is because we no longer have any employees. Thank you Jeff
Alma Ortiz
Alma Ortiz
22:25 23 Feb 20
Brendan was awesome! I couldn't figure out how to pick my plan and he returned my call on a weekend to help me. Outstansing service!
jessica kavanagh
jessica kavanagh
19:53 13 Feb 20
Brendan was so helpful I definitely recommend him if you’re in need of good help and getting it done promptly. Thankyou so much again.
Tricia DeYoung
Tricia DeYoung
19:49 13 Feb 20
I was very thankful I inquired about this info. with Brendan. He was very helpful so I understand the benefits available much better now. Thank you Brendan.
B Bayer
B Bayer
17:43 24 Sep 19
NCI handled almost everything from start to finish. Clayton and Brendan made the plans easy to understand and walked me through the application process. They got me my ID numbers before my cards arrived so that I could keep an appointment I had already scheduled. My last broker wouldn't have done that. 5 stars!
Jessica Lehr
Jessica Lehr
03:36 07 Jun 19
Our staff was interested in a health plan, but we didn't know how beneficial a solid employee benefits package would be for our business to expand. We'd lose prospective employees because they had more options for their medical insurance which was sometimes more valuable than more pay. The New City team was amazing and gave us as many affordable options as possible so that everyone had their needs met.
Mike McClay
Mike McClay
19:36 03 May 19
My employer uses New City as their insurance broker, and I'm always amazed when I call in for assistance by how knowledgeable and attentive their staff is with my requests. Their online benefits platform makes selecting insurance plans pretty darn easy. I would highly recommend their services.
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