The true cost of employee churn
It’s more than just dollars…
The Corporate Finance Institute defines employee churn rate as a portion of employees who leave an organization in a given period of time. As such, churn rate is often raised in the context of employee attrition or turnover. Although some staff turnover is inevitable – and even necessary – in today’s business, a high rate of churn can be incredibly costly.
Within the finance industry in particular, attrition presents a very real challenge. Given the caliber of human capital in financial services, a lost employee results in lost knowledge, insights and ground-breaking ideas. When a high performer exits, the ripple effects can be disastrous. And given the detrimental impact of turnover tied to loss in productivity, resource allocation and hard dollars, it’s more important than ever. The stats speak for themselves:
HR leaders cited employee turnover and retention as their top challenge. (Globoforce)
2020 reasons employees quit that could have been prevented by their employer. (Work Institute)
It costs nearly three times an employee’s salary to replace them. (Right Management)
While the short- and long-term costs of employee churn vary by industry, role and organization, there are a few overlapping results that affect the masses. In order to prioritize employee churn, you must first understand how it impacts your bottom line. From there, you’ll realize it’s no longer a stat to gloss over, but rather one to target head-on.
Discover the 7 Costs of Employee Churn
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