Thriving Amid the “Turnover Tsunami”
Sept 14, 2021 | The “Turnover Tsunami” is coming.
HR experts across North America have talked about it since early in 2021: people are burnt out. Between pandemic stress and uncertainty, longer working hours due to reduced staff, less engagement (Zoom doesn’t count), and less HR advocacy: employees across Canada are ready for change.
Add to that: with remote work and rolling lockdowns throwing a wrench into how we live our lives, we’ve all been forced to reconsider our priorities. Employees are asking themselves if they’re valued at work, if they’re fairly compensated, if their work/life balance is healthy, what conditions & culture they prefer, and what they actually want to do in general. In fact, a recent study revealed that 52% of us plan to look for a new job this year.
All this combines for unprecedented levels of turnover across nearly every industry across North America.
In a good year, the cost of turnover is staggering. It varies by industry, but the overall Canadian average in 2018—before current challenges—was around 21%. The true cost of that is often hard to see (as it includes recruiting, training, as well as lost productivity), but experts place it at roughly 33% of an employee’s salary.
That means, for a company with twenty employees:
- You can expect to lose four employees each year
- Each loss will cost you around $17,000*
- Your total cost of turnover will be about $68,000 per year
That’s in a good year! This coming year will present historically high turnover, and employers will undoubtably face many challenges—but they also face a choice.
Turnover means employees will be on the move, but where are they moving from, and where are they moving to?
In the coming months, many businesses will lose some of their best people. But at the same time, many others will attract great new talent. So, the question we should ask ourselves today is: which will we be? Can we be that employer of choice offering greener pastures?
The title, employer of choice, has often seemed like a nice-to-have, but as the cost of turnover threatens to soar: it will be more cost-effective to invest in your ability to attract and retain employees than to lose them.
But that still sounds cost-prohibitive, doesn’t it? So how can a business with a tight budget approach it?
First: count the cost of turnover. Do the math: what would it cost you to lose a quarter of your staff, and how much could you save if you were able to keep just one or two or three of those people? Add that to your budget and use it to motivate your decisions going forward.
Second: don’t simply look for quick perks. Recruiting, engagement, and retention do not come down to 5% raises, office yoga, or a 10% expansion in dental coverage. Becoming the type of employer employees flock to requires company-wide culture shifts and a change in philosophy that prioritizes proactive management strategies over reactive ones. Which means, among other things:
- Getting clear about roles, responsibilities, and expectations, and conducting regular check-ins rather than only acting when issues arise.
- Implementing health & safety programs & policies rather than managing incidents
- And learning what benefits employees value and finding a model to suit their needs rather than shopping an outdated plan for better rates
Third: ensure you’re hiring the right people for the job, because no amount of engagement activities will make up for lack of fit. If an employee doesn’t match the culture of your organization, or their skills and behaviours don’t match the demands of their position, they’ll feel frustrated and disenfranchised, you’ll be disappointed, and their fellow employees will feel the friction.
Hiring for fit has often felt like throwing darts at a board, but thanks to evolving technologies in behavioural assessments—Predictive Index, for example—employers now have access to online tools for assessing their specific demands and evaluating how well candidates match up.
Fourth, and most importantly: avoid seeing the process as adding new costs, or trading one cost for another. These changes are an optimization process: reduce waste, streamline inefficiencies, then reallocate savings to value-added training, benefits, and more. When done right: the process won’t cost a dollar more than current expenses and will instead dramatically increase profitability.
Creating organizational change is not rocket science, but it does take time, and is most-easily managed with the help of HR Professionals. So, if you need a hand tackling challenges around turnover, recruiting, health & safety, benefits plans, and more, reach out to our team at EIO Solutions.
EIO provides access to experts without the full-time salary of an HR professional. We’ll first perform a complimentary 60-Point EIO Audit to assess your most-pressing needs, make an action plan for improving policies, procedures, and employee benefits, then work with you to continually implement and optimize that plan.
To learn more about how EIO Solutions can help you become an employer of choice and thrive amid the upcoming Turnover Tsunami, contact us today to book your complimentary EIO Audit!
*Cost of turnover based on an average annual CDN salary of $51,000
Retaining your best employees and adding great new people to your team starts with a free call with an EIO Expert. Fill out the form here to schedule your meeting today!