Turnover of employees is sometimes unavoidable. But, when a business loses an employee, there is a lot more at stake than having to find a replacement.

High employee turnover hurts your business in a number of ways.

The first and most apparent are the costs involved in employee turnover. According to the Rainmaker Group, you should consider this,

“If your firm has a turnover rate of 25% (about the national average) and employs 40 employees each earning $25,000 annually, your costs of turning over 10 of these employees over the course of a year will be at least $125,000! What could you do with an additional $100,000+ in resources?”

These costs include recruiting, interviewing and training but there are also other costs to consider. Severance pay or redundancies are a large part of employee turnover costs especially with skilled employees and upper management.

There is also the effect of lost productivity on the business. It takes about eight weeks to get a new worker onboard. Other employees in the meantime have to pick up the slack performing duties they are unfamiliar with and this hurts your dream team’s morale.

There can also be a significant loss of customers when you lose an employee. Rainmaker Group give this great example of what can happen when you turnover skilled workers.

Many employees enjoy a loyal following of customers with whom they share a real connection. The father of a close friend of mine is a great example. As a parts dealer for an automotive service centre he worked with many customer on a regular basis and formed a real bond with these customers. They trusted him and knew they he would do whatever possible to help them. When this individual left that position and went to a competing service centre, so did almost all of his loyal customers. Little did the firm know that the customers where loyal to the employee, not the company – and they paid dearly when they were unable to keep him on board.

“Many employees enjoy a loyal following of customers with whom they share a real connection. The father of a close friend of mine is a great example. As a parts dealer for an automotive service centre he worked with many customer on a regular basis and formed a real bond with these customers. They trusted him and knew they he would do whatever possible to help them. When this individual left that position and went to a competing service centre, so did almost all of his loyal customers. Little did the firm know that the customers where loyal to the employee, not the company – and they paid dearly when they were unable to keep him on board.”

When a business loses employees they also lose workers with organisation knowledge of the company. When your worker walks out the door, so does a great deal of knowledge about your business. Furthermore these workers will no longer be able to mentor junior members of your business.

The turnover of employees is unavoidable and it is not desirable to completely halt turnover from your business. You will always have times when it is good to introduce new blood into the organisation.

A business coach can help you with strategies to reduce high employee turnover in your organisation. Most capitol cities such as Melbourne, Sydney and Brisbane have business coaches that can help you retain your dream team.