It’s no secret that high employee turnover can be expensive. From recruiting to onboarding to training, having to constantly replace employees is something most business owners would like to avoid.
In addition to these hard costs, high employee turnover also has hidden costs that can directly affect your business. That’s why Vice President of Human Resources, Ron Cardenas, says it’s so important for business owners to do everything they can to retain talented employees.
Damage to the Brand
When employees leave a business, they create a hole in certain aspects of the operations. It could lead to a period of poor customer service, a slowdown in product fulfillment, or a scramble to get organized.
This can often lead to your customers and clients not getting the experience they are used to. High employee turnover can seriously damage a business’ brand if they’re not careful and prepared.
Damage to Productivity
Current employees can also be seriously affected by departures. When one employee leaves, it’s incumbent on those who remain to pick up the slack until a new hire can be made.
This stretches your employees quite thin and could result in a significant decrease in productivity across multiple departments. As employees chip in to cover the departed employee’s responsibilities, they may fall behind on their own day-to-day duties.
Damage to Morale
When current employees feel overworked, they often don’t feel appreciated. And when they don’t feel appreciated, they typically have a less favorable view of the company.
Low employee morale is directly associated with lower productivity, less care about the company, and an overall sense of every person-for-themselves.
In addition, high employee turnover may cause some of your most talented employees to question why they are sticking around. As employees continue to leave your company, they may start to look around for other opportunities as well.
Loss of Intellectual Capital
Talented employees possess a wealth of individual knowledge. No matter what position they have in the company, and no matter how much you standardized operations, the company will lose valuable insight and knowledge when high employee turnover occurs.
The most talented employees bring unique skills to the table that are hard to replicate. They also often bring years of industry experience and some ways of doing things that are hard to teach.
This knowledge isn’t transferred to your other employees when there is high turnover, either. This means your company will lose this valuable knowledge.
The company may also lose valuable relationships the departed employee established with key stakeholders, vendors, and clients. When there is high employee turnover, this could be an enormous hidden cost that will be hard to overcome.
Ron Cardenas, VP of HR, emphasizes the need for businesses to do everything they can to retain talented employees. Turnover doesn’t just result in high costs of recruiting, onboarding and training. These hidden costs could have lasting effects on the business long after the employees have departed.
About Ron Cardenas
Ron Cardenas is the Vice President of Human Resources at an agriculture holdings company in Omaha, Nebraska. He is a versatile Human Resources professional with over 30 years of domestic and international experience. His track record includes creating and launching talent strategies for global organizations in varied industries.