If you are tired of replacing employees all the time at your business, you may want to talk to a consulting firm about employment screening options. Utilizing the right screening techniques may help you reduce your employee turnover rate, and this could help you save money and become more profitable. Here are three things to consider when it comes to employee turnover rates.
What Is Employee Turnover Rate?
Employee turnover rate is a ratio you can calculate to determine how often you must replace employees. Aiming for a 10% rate is considered ideal, but the average rate in the U.S. is currently around 15.1%. The goal is to reduce the rate you are at, because it costs your company money each time you replace an employee.
If you are not sure what your current rate is, you can calculate it with a simple formula. If you want to calculate it for a year, you must know how many employees you lost and the average number of employees you have.
For example, if you have 110 employees on average and lost 12 of them during the year, you would divide 12 by 110 and then multiply the answer by 100. The answer to this is 10.9%. This does not seem so bad, but if you had lost 25 employees, the rate would jump to 22.7%.
Your first step should be to calculate what your current rate is at. If your rate is over 10%, you may want to find ways to reduce this number, because high rates have a lot of negative effects on a business.
What Problems Are Caused By High Employee Turnover Rates?
There are a lot of different problems caused by high employee turnover rates, and you can begin to understand this by thinking about how much effort it takes to train a new employee. In most cases, all new employees will need to undergo a lot of training before they are ready to work on their own.
It is hard to say how much money this can cost your company, but you can expect it to cost anywhere from $2,000 to $8,000 for each new employee you hire. The money spent on each new hire takes away from the profits your company makes, which is why it is vital for you to find ways to reduce your employee turnover.
How Can You Reduce This Number?
There are several good approaches to take to reduce the number of employees you must hire to replace those that leave your company, but a good place to start is with a consulting firm that offers employment screening services.
Employment screening is a process used for several purposes. First, it weeds out applicants that are not qualified for the job. Next, it researches the backgrounds of applicants. Finally, it helps you choose the right candidate for each job position. Employment screening often involves conducting background checks, criminal history checks, and education verification. It can also include a variety of other steps too. Click here for more information on employment screening companies.
A second good step to take to retain your employees is keeping them happy. Many employees leave their jobs for one of these reasons:
- They do not feel valued.
- They are not earning enough money.
- There is no potential for growth.
- They are overworked.
If you can make your employees feel valued, offer a fair salary, and give them room to grow in the company, they might not leave.
Understanding the effects of employee turnover can help you make the right changes to reduce this number. If you would like to learn more about this, talk to a company that offers employment screening services.