How Employees Cost Businesses Over 1 Trillion Dollars a Year

man walking to work

ONE. TRILLION. DOLLARS.

A trillion dollars? How can employees even have such an impact? Well, this all results from voluntary turnover within companies.

Here are the stats, according to the Bureau of Labor Statistics:

  • The annual overall turnover rate in the U.S. in 2017 was 26.3%, based on the Bureau of Labor Statistics.

  • The cost of replacing an individual employee can range from one-half to two times the employee's annual salary -- and that's a conservative estimate.

  • So, a 100-person organization that provides an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million per year.

 
 
 

Why This is Happening?

Let’s get to the bottom of this. This issue is even more prevalent now more than ever. First, we have the COVID-19 pandemic that has so graciously established itself as a staple of our everyday lives. The pandemic has brought significant amounts of change to the way we operate within business. More companies are offering work from home or hybrid positions, some companies are even migrating to 100% remote positions. Then, you have employees who decide to leave their company to chase their own dreams. And lastly, we have disagreements when it comes to companies that mandate the vaccine for their employees, causing some people to leave their employer.

Then, we have Millennials and Gen Z’ers in the workforce who are steadfast in their beliefs. It has proven time and time again that these generations prioritize opportunity, growth and happiness over loyalty to their employer. In past generations, you frequently see employees celebrating 20, 30, even 40 years at one employer! However, we also frequently see the newer generations moving on from their jobs just months after starting them.

We are living in unprecedented times as it is, and the turnover rate within companies is speaking for itself. To avoid losing more money as a result of unhappy employees, employee retention and engagement should be the #1 priority of any company.

The Solution

According to Gallup Research, 52% of employees who voluntarily left their job said that their manager could have done something to prevent them from leaving. In fact, 51% of employees have said that they had not spoken to anyone in the organization about leaving their job or their job satisfaction in the 3 month leading up to it.

Companies need to realize that their employees are actual people, not just assets.

These people have emotions and aspirations that need to be tended to, and if they are left unrecognized, your company will continue to lose millions annually because of turnover. After all, isn’t that why you have an HR department in the first place?

To help with employee retention and lowering turnover, Swoovy focuses on helping businesses recruit, engage and retain your employees. Through giving meaning to employees in the workplace, research has shown that software supporting employee volunteer programs develops a happier and healthier work environment.

  • 82% Of employees who volunteered through an EVP felt more committed to their company.

  • 87% Of employees who volunteered through an EVP reported improved perceptions of their employer.

  • 76% Consider a company’s social & environmental commitments before deciding where to  work.

    (Cone Communications)

Learn more about making it easy to connect employees with volunteer opportunities that are meaningful to them, while tracking corporate impact. Schedule time with Swoovy’s leadership team to learn how you can easily implement an employee volunteer program.

 
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