The statistics on employee turnover speak for themselves:
“Employee turnover rates currently stand at 13.7% for distribution, warehouse and manufacturing functions.”
“U.S. businesses lose $11 billion annually due to employee turnover.”
“As many as half of all hourly workers leave new jobs within the first 120 days.”
“Direct costs to replace an employee can reach as high as 50% to 60% of an employee’s annual salary.”
According to the Labor Department, more people are quitting their jobs than at any time in more than six years. That should come as no surprise since employee turnover rates have been edging upward for the last few years, and currently stand at 13.7% for distribution, warehouse and manufacturing functions, according to Compdata Surveys’ BenchmarkPro report.
Employers also face generational shifts (bye-bye, baby boomers) that will cause an increasing number of employees to move in and out of jobs. In fact, voluntary turnover rates are increasing for Generations X and Y workers, who currently make up more than half of the U.S. workforce.
It’s clearly time to take a proactive approach to turnover.
Although employers can’t completely control turnover, they can create a workplace culture that attracts the best talent and encourages good employees to stay. The best defense against employee turnover (and employee turnover costs) can be a good offense that utilizes the capabilities of a labor management program and technology.
Labor management programs have typically been utilized as a way to control or reduce labor expense. As these benefits are certainly important, a labor management program can also help your workforce retention challenges by:
- Identifying your best performers so that you can recognize and reward their efforts
- Allowing you to set, monitor and communicate performance goals and progress so new hires know exactly where they stand
- Utilizing labor standards that set a level playing field that’s fair to all associates from new trainees to experienced veterans
- Establishing pay for performance programs that allow employees to earn additional compensation, yet is fully self-funding
For more suggestions and solutions on reducing employee turnover, please read our Turning Off Your Turnover Problem white paper.
Can you justify implementing a labor management program based on a reduction in your turnover costs? The Center for Economic and Policy Research (CEPR) online calculator can help you estimate your direct turnover costs. Then TZA can help you determine what your investment would be and also estimate your gains in workforce productivity and utilization.
Contact us to get started on addressing your employee turnover problem.