The Turnover Tsunami, The Great Resignation, The Big Quit … whatever you want to call it, employee turnover in the COVID-19 world is gaining serious momentum. The talent shortage, coupled with the gradual exit of Baby Boomers is turning hiring into a challenge. Many companies are working hard to hold on to the talent they already have while making themselves appealing to new employees. Great benefits and high salaries are no longer the highlights of your job listings. To secure top talent, you have to go the extra mile. One significant part of it is high-quality training.
Eye-Opening 2021 Employee Turnover Stats
It’s no secret that U.S. businesses are struggling to retain and attract talent. Statistics make the problem highly visible.
- In 2021, an average of 25% of employees across all industries left their jobs voluntarily. The overall turnover rate across industries was 57.3% (HubSpot)
- Between 2020 and 2021, the average increase in resignation for employees between 30 and 45 years old was 20%. (Harvard Business Review)
- Over 20 million Americans quit their jobs in the second half of 2021. (CBS)
- The gap between labor demand and labor supply is quickly widening in Healthcare, Leisure and Hospitality, and Retail Industries (The Guardian)
- In November 2021, a record-breaking 4.5 million people left their jobs (S. Bureau of Labor Statistics)
- The number of American employees quitting has been exceeding pre-pandemic rates for eight months in a row. (Statista)
- More than 48% of employees are already looking for a new job or will start looking for one within 90 days. (BusinessWire)
- Employee turnover costs U.S. businesses $1 trillion per year. (Gallup)
Becoming an employer of choice during the Turnover Tsunami can be tricky. By digging deeper into the reasons, it’s possible to gain insight into your further actions.
The Real Costs of Employee Turnover
To calculate the real costs of turnover for your company, consider implementing a cost tracking system. The results may surprise you. Employee turnover takes a serious toll on any company’s budget. The costs include:
- Recruiting: advertising, screening, interviewing, and analyzing takes time and money, especially if you don’t have a sizable HR team.
- Onboarding: depending on the position, onboarding can involve time-consuming training and management time.
- Lost productivity: no matter how good the new employee is, it can take them months to reach the productivity levels of the predecessor.
- Low employee morale: high turnover rates hurt employee morale and lead to a quitting pattern.
Replacing one employee can cost between 30% and 100% of their annual salary. Besides factoring in the costs of recruiting and onboarding, you need to consider the time you lose while looking for a new employee and how it affects business operations. Meanwhile, your existing staff will need to work harder to fill the gap, thus bringing satisfaction levels down. It can take up to six months for the company to get a reasonable ROI on a new hire. By that time, some of these employees may decide to leave.
Main Reasons for the Great Resignation
Many employers blame COVID-19 for the Great Resignation. The key pandemic-related reasons include:
- Burnout. Many employees are overwhelmed with the extra work and long hours they had to put in during the pandemic. As companies were trying to save money and laying off their workforce, the remaining employees had to literally pull double shifts.
- Flexibility. The pandemic showed employees that flexible work hours are possible. They don’t want to come back to the 9-to-5 routine. Many people are looking for flexible work opportunities to gain time to spend with their families and nurture the work-life balance.
- Pent-up demand. Many employees put quitting off due to the pandemic since they were afraid of losing a source of income. Once the world learned how to live in the new normal, employees became more willing to let go.
- Available opportunities. With more and more job slots opening up, employees are taking chances and looking for better employment opportunities.
While the pandemic fueled the Turnover Tsunami, it’s hardly the only reason why the turnover rates are at their all-time high. The common reasons for quitting are still here:
- Lack of internal growth
- Poor career opportunities
- Lack of recognition
- Unappealing company culture
- Poor learning and development opportunities
Additionally, the 2021 – 2022 turnover spike is fueled by the talent gap. In 2020, 40% of Baby Boomers left the workforce. Meanwhile, other generations are having a hard time filling their roles.
You Need Them More Than They Need You
Amidst the Great Resignation, employers often lose track of an important concept. They need employees more than employees need them. This creates a competitive hiring environment among companies, but attractions and retention tactics don’t evolve. It’s up to the company to create an appealing environment that makes top talent value the employment opportunity. One of the approaches is proper training. In-house training allows employees to: When done right, high-quality training keeps your existing workforce satisfied with their employment options. Meanwhile, it creates an appealing environment for potential candidates, making you an employer of choice.
- Grow within the company
- Take advantage of internal opportunities
- Hone skills
- Feel needed in the workplace
- Reinforce their purpose in the workplace
The bottom line is simple: Employees are valuable to your company. Let them know through actions.
High turnover rates are affecting all American industries. In the race for better talent, companies often overlook the importance of streamlining retention strategies. As your competition is offering better benefits, higher salaries, and other perks, you may want to invest in less obvious tactics like top-notch training that help employees feel their value. At Knowledge Anywhere, we can help you adjust your hiring and retention strategies by providing the right tools for a comprehensive training system. Learn more about gaining an upper hand amidst the Turnover Tsunami today and contact us today to talk to an eLearning professional for free!
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