Calculating Turnover Costs: Companies with 10k workers spend $41.3 million on Employees That Don’t Stick Around
A company that employs around 10,000 workers can easily end up spending $41.3 million solely on employee turnover costs if they engage these workers as direct hire, internal employees. Companies waste a phenomenal amount of money on recruiting, statutory employer and training costs when these employees – who have been lavished with resources - decide to leave after just a short period of time.
An average salary for an entry level position is only around $30k/year, but the cost to replace this level of employee can be up to $22.5k. For mid-management positions, the average annual salary is $70k/year, and the cost to replace these employees rises to about $52.5k. Senior-management level employees earn an average of
$150k/year, which will cost the company an unbelievable $112.5k when they need to replace them.
Across the board, regardless of the level of skill, experience and pay rate of the worker, the turnover rate for a company this size is thought to be around 11% and the cost to replace the workers is a staggering $75% of their pay rate. Taken together, Entry level + Mid-Management + Senior-Management turnover costs = $41.3 m in total wasted spend for a company of 10,000 workers.
However, companies of all sizes could stand to save money on their turnover costs, especially in this economy. Often, engaging workers’ on a temp to hire basis can be a great way to find out if a candidate is both suitable for the role and fits into the company’s culture before they take on an internal, direct hire position as an employee.
By offering positions on a temporary 3-6 month contract, both the employee and the company can figure out if they are mutual fit. If you’d like to find out more about how to engage all levels of workers on a temp-to-hire basis, please call us at 855 250 5000 or e-mail us at firstname.lastname@example.org and we’d be happy to help advise you on whether this strategy makes sense for your business.
Here’s a link to the full calculating turnover costs infographic pin on Pinterest pinterest.com/pin/129971139217036431/
And a link to the full article by Darcy Jacobsen at Globoforce
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