Does your culture make you an employer of choice?
As any manager knows, high voluntary turnover is an issue you just don’t want to have. Many people cycling in and out of a company not only erodes the culture, but is incredibly expensive. With the inevitable replacement costs, loss of organizational knowledge, and impediment to productivity among other problems, studies estimate that the average cost of turnover can be up to 200% of the exiting employee’s base salary, and 12% of a company’s operating budget.
One of the best ways to reduce voluntary turnover and its financial burden is to focus on developing a high-trust, high-performance culture. At the Fortune 100 Best Companies to Work For®, an average of 87% of all employees say they “want to work here for a long time.” And as the graph above shows, these high-trust companies report approximately 50% of the voluntary turnover experienced by their industry peers, giving them a strong advantage over competitors.
In high-trust cultures, employees have mutual respect with their managers and their fellow colleagues, as well as a deeper connection to their daily work that strengthens their overall sense of purpose at work. As a result, people want to stay.
Of course, some turnover cannot be avoided as people experience life changes, such as retirement or relocation. However, reducing and preventing turnover should be a top priority of all organizations since it significantly impacts:
- Profitability and market value
- Productivity and performance
- Sales and company growth
- Workforce morale
Great Place to Work® consultants work with your company to create and sustain the type of workplace environment that top talent wants not only to join, but also to stay and build a long-lasting career.