Understandably, a lot of employers think more about bolstering their staffs than they do about losing their staff members. But, employee turnover is a problem that affects all business types. Naturally, it costs money to have to continually hire and train new employees. On SmallBizTrends.com, Barbara Weltman notes that “a stable workforce is a money saver.” This is because the more employees who leave your business, the more money you have to spend to replace them.
How exactly does employee turnover cost companies money? Weltman points out that part of the problem that employers have is that they often have to contest erroneous unemployment benefit claims. “If employees leave voluntarily, they aren’t entitled to benefits,” she explains, “but if you don’t contest their claims your unemployment insurance costs will rise.” In addition, Weltman makes the point that there are costs involved with the recruitment process.
Yes, you can post job openings online for free. Many companies make use of such sites as Craigslist and Kijiji or even social media platforms like Facebook to let it be known that they have job opportunities available. But, as Weltman reminds us, “it takes the time of you and your staff to interview applicants and make hiring decisions.” And, of course, there are costs involved with paying members of your team to interview and train new hires.
How is employee training a hidden cost that affects small businesses? No matter the type of training required, the more training you have to do, the more it costs your company. “Training, which can be internal (e.g., supervisors spending time with new employees) or external (e.g., additional training to get an employee licensed for their new position), is a serious expense,” states Weltman.
On WaspBarcode.com, Brian Sutter reminds us that employees don’t necessarily have to leave your company for good in order to cost it significant amounts of money. There are various reasons that employees may need time off. Between illnesses, injuries and family emergencies, there may come times when you are paying your employees when they’re not even doing their jobs.
“The people that help your business run significantly impact its potential,” writes Sutter, “Salaries, personal and medical leave, health insurance and training costs factor into the budget. Failing to invest properly in your employees, providing a living wage, a clean environment, office perks and other benefits can lead to high employee turnover. Furthermore, it costs about one-fifth of a worker’s salary to replace that person when they leave.”
What can be done to avoid a high rate of employee turnover? Sutter suggests that you provide perks. It’s important to know that the offering of incentives in order to keep employees happy – and therefore, loyal members of your staff – will save you money in the long run. “It’s more cost-effective to retain good employees than recruit new ones,” he insists, “These perks don’t have to be pricey; benefits such as flexible schedules, telecommuting and casual dress codes can do a lot to boost retention.”
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For more information on our merchant cash advance program or to speak with one of our licensed funding specialists to get a free, no obligation quote, simply call Synergy Merchants at 1-877-718-2026 or email us at email@example.com.