Do you think twice about your employee turnover rate? Should you? If you only knew how much employee turnover really cost your organization in cash flow, you would. If you’re one of the fortunate few that have a low turnover rate, you probably won’t need to spend too much time or thought on it. But if you’re not so lucky, then you really should evaluate how turnover affects your productivity, residents, employees, net operating income, and cash flow. Some level of turnover is acceptable and expected, but excessive turnover can be costly. There will always be a need for employees to leave, voluntary or otherwise, and sometimes it is in the best interest of your operations. So what is an optimal turnover rate? There are a few different categories of turnover that should be monitored and each company/community will be somewhat unique. Your specific employee turnover rate will be dependent upon the type of services provided, wage rates, the average age of your employees, management styles, company culture, and the local economy to name a few.
Turnover not only has a financial cost, but when good employees leave, it affects your residents as well as other staff members. When residents and their families have been served well they do not like to see a change. They were used to working with someone who knew them and their needs and now they must start over again. Good employee departures have the same basic negative effect on other staff members, both in the same department and others throughout the company. There is the loss of a colleague/friend/acquaintance, someone has to do more work to cover the vacated position, and the hassles associated with training a new person for the job among other things.
Has the poor economy and high unemployment rate held your turnover to a minimum? Do you have pent up turnover; those intending to make a move once the economy picks up and we begin to have a period of reduced unemployment? Over the coming months I will explore turnover much more in depth. Please follow our blog and signup for our newsletter so you don’t miss any future discussions on employee turnover.
What are some of your employee turnover success stories? What have you implemented that is helping you hold your turnover rate down, we would like to highlight your successes in future articles. On the other hand, what are some of your employee turnover horror stories? We would like to try and address issues you may currently be having. For those who would prefer anonymity, feel free to direct message me and I will hold your identity and company name in the strictest of confidence.
[Infographic courtesy of Compliance and Safety]