“Turnover” a new leaf with your Employee Retention Rate

01.03.2019 / Carly Sparpana

Turnover a new leaf with your employee retention rates.

Recruiting is often defined as the flow of candidates into your recruitment funnel. A large group of candidates fills the top of your recruitment funnel. These candidates are then narrowed down by various qualifications and requirements at each step, such as experience type and length, achievements, and location. You’re left with a group of qualified candidates once your initial applicants have flowed through the quality filter. No doubt this is a crucial piece in the recruitment puzzle, but employers should keep in mind there is also an often-overlooked piece that is more difficult to address: employee turnover.

Recruitment Advertising is a tangible solution that applies mathematical formulas and tracks the return on your spend. If your average cost-per-hire is $1,200, and you need to hire ten people, you will likely need to spend $10,000-$15,000 to reach your goal. However, the cost of employee turnover is also real and much more difficult to calculate. Recruitment advertising will ensure candidate droplets into the bucket, but what if that bucket has a significant “employee turnover” leak in the bottom?

There will inevitably be some level of turnover at any company, but the key is to view its examination as a necessary supplement to a healthy recruitment advertising strategy. The cost of losing an employee can go far beyond the direct financial expense of paid advertising. There is also the financial cost of the time it takes for members of your staff to screen, hire, onboard, train, and manage a new hire. The process can bring with it a loss in productivity and delays in customer service. It may take a new employee 4-6 months to reach the productivity of an existing person, and in the meantime, they run the risk of making errors or upsetting the current client/customer balance.

An even more unseen aspect to a high turnover rate is how it affects culture with current employees. When an employee leaves, others might take the time to ask why, and if turnover is high enough there might be a chance of disengagement and lost productivity with current employees as well. This is even more damaging within smaller organizations where departing workers are more likely to be the only ones possessing a particular skill or knowledge set, and there is a smaller internal pool of workers to cover the lost employee’s work while a replacement is found.

Identifying drivers of employee turnover and making a commitment to examining them further is the first step. Every company may have their own unique set of turnover drivers, however, there are a few key considerations to be made:

  1. Offering competitive pay and benefits. This is fairly obvious and is a big one due to the wealth of salary information at everyone’s fingertips on the internet. Perform competitive analysis research to see how your company’s compensation packages stack up to the competition.

  3. Outlining career development opportunities. Most employees want to consistently increase their skills and knowledge over time to continue an upward path within their company. Communicating a projected career path can give employees a sense of direction and purpose, and a guide to benchmark progress against. Even if the path stays within their current role, help them to see how they can continue growth within your company.

  5. Examine your company culture. Studies have shown that more often than not, employees value things like appreciation for their work, good relationships with colleagues/superiors, and a solid work-life balance higher than pay and benefits alone. Employees want to feel valued and recognized, they want consistent feedback for growth, and commendation for a job well done. That’s not to say it’s required that you shower employees with praise or congratulations on everyday tasks, but focus more on creating a positive and encouraging work environment whenever possible.

  7. Hire the right person, not the right now person. Companies should consider not only hiring employees who have strong skills and backgrounds that match open positions but ones who are cultural fits for the company as well. It may not always be a viable option, but spending extra time to find the right person can end up benefiting tenfold in the long run.

  9. Determine and develop a strong Employee Value Proposition, and highlight it in conjunction with paid recruitment advertising. This will reinforce the employer brand internally and can help companies locate and hire the right people on the front end.


Some research suggests that direct replacement costs can reach as high as 50%-60% of an employee’s annual salary, with total costs associated with turnover ranging from 90% to 200% of annual salary. However, the exact cost of turnover is difficult to determine precisely, as there are many variables to consider such as the employee’s title and location, and the company’s industry and size. All of these can make employee retention abstract and difficult to position front-and-center when assessing employment as a whole. An employer’s best bet is to take Employee Value Proposition and turnover drivers just as seriously as a recruitment advertising strategy and budget in their long-term goals for their company.

Are you interested in a free audit of your company’s current EVP or recruitment advertising strategy? Click here to find out more.