Losing good employees, and keeping bad ones, means losing money — big money. The kind of money that can be the difference between a thriving company and a struggling one. Why ScorecardHR? The answer is simple: We want to help you stop the loss.
Did you know that a company with at least 20 employees will conservatively lose $100,000 a year to employee turnover? We know that number sounds shocking, but we hear it from business owners all the time. First, they will say, “I never lose nearly that much!” But when we break the numbers down with them, we find that to be a typical expense. Keep in mind that all these expenses factor in:
- Exit costs
- Compensation/benefits during training
- Lost productivity
- Customer dissatisfaction
- Reduced or lost business
- Administrative costs
- Lost expertise
- Temporary workers
Do you want to know the response from most business owners when they see this breakdown? “That’s just the cost of doing business.” But the thing is, it’s not. There’s a difference between a cost of doing business and a loss.
A cost you expect to pay.
A loss you find a way to stop.
This drain on your profits is a loss, and a preventable one at that. At ScorecardHR, we’ve developed a proven method and cutting-edge software that will stop that loss and help you make and keep higher profits than ever before.
Don’t Just Take Our Word for It …
In a CBS News article How Much Does It Cost Companies to Lose Employees it says “In jobs with a salaries of less than $50K per year (that’s 40 percent of U.S. jobs), the average cost of replacing an employee amounts to fully 20 percent of annual salary, a CAP report that used 31 corporate case studies as a sample found. High-turnover, lower-paying jobs (under $30K a year) are slightly less expensive to replace (16 percent of annual salary), and the cost of losing an executive is astronomical — it can be up to 213 percent of salary.”
It’s not just the CBS News that found a problem, multiple sources cite employee management as a source of large financial loss for businesses. We are frequently finding these article and posting them in our Info & Articles page.
Breaking Down the Cost
- The AVERAGE annually salary in the U.S. is $39,180. This full salary is the lowest cost of a bad employee.
- The LOWEST cost for turnover alone is 20%.
- The MINIMUM Turnover rate is 10%.
If we use a business with 20 employees as an example, this results in a turnover rate of two employees a year.
|Source||Annual Salary Cost||Average AL Annual Income||Turnover Cost||Bad Hire Cost||Per-Employee Annual Cost
||Two-Employee Annual Cost|
No matter who runs the numbers, the cost of losing employees is too high. We average the results to find that the range of cost to a business with 20 employees is $94,032 – $195,900.
This is a loss you can be preventing — and we make stopping the loss easy with ScorecardHR.