Research results quantifying the costs of replacing an employee leaving vary widely, but all confirm that the process certainly isn’t cheap.
The most common guideline quoted of an average cost of between six and nine months’ salary stems from The Society for Human Resource Management (SHRM) – the world’s largest HR association in the US.
Some other sources estimate the overall costs to be much higher still, in some cases between two and four times salary.
There can be much more involved than just direct costs like screening applications, conducting interviews and paying for recruitment consultants.
For example, an employee leaving can result in lost productivity, missed deadlines, and a drop in team morale as a result of increased workloads and of a valued personality being missed.
The fact that the softer costs are harder to quantify contributes to the survey discrepancies. So does the tendency for different surveys to refer to different grades of staff. The more senior employees often involve the highest percentage of salary costs to replace.
But, whatever figures you choose to believe, they refer to expenditure that most organisations could do without.
Reasons for leaving
The reasons for employees wanting to jump ship can be many and varied, ranging from disenchantment with workloads or leadership to limited opportunity, unsuitable role assignments, feeling disrespected or the lack of a psychologically safe working environment.
But research shows that some factors play a more important part than others and, fortunately, these are ones that offering an attractive employee benefits range can play a major part in mitigating.
According to the 2024 Drewberry Employee Benefits And Workplace Satisfaction Survey, a staggering 71% of employees are ready to leave their current workplace for better pay and benefits – compared to 44% who would leave for better work-life balance or 33% for career progression.
Plugging the gaps
So, Chase de Vere can really help here because we offer benchmarking services that can demonstrate how your benefits range compares with those of direct competitors in your field.
In the case of clients who get employees to complete exit interviews, we can also take on board the feedback we’re provided with. Leavers may, for example, not feel their pensions contributions are high enough or may lament that, unlike those they know at rival firms, they don’t have access to a private medical insurance (PMI) scheme.
Armed with such information, and budget permitting, we can help to try and fill any gaps in your benefits range. And by doing so, as well as boosting retention, we can increase the productivity of remaining employees by making them feel more valued.
Recent Reward Gateway research shows that employees feeling appreciated can be a key driver to workplace success, leading to 88% reportedly working harder, 73% taking on extra work, and 91% feeling more engaged.
Helping to communicate
But having the right benefits package is of limited use unless employees are aware of what benefits they have access to and of why they are important.
Chase de Vere has a crucial role to play here as well in communicating these things to your workforce.
In addition to the annual communications exercises we carry out for clients to reinforce the value of benefits on offer, we can conduct tailored talks in the workplace and provide a wealth of generic information via the company intranet and through webinars and face-to-face seminars.
We can also support clients by helping them design questions for staff surveys to determine whether existing benefit ranges are living up to expectations and by arranging for suitable providers to produce total reward statements – enabling employees to understand at a glance their total compensation beyond their salary.
Additionally, we can conduct induction sessions, explaining to new hires what benefits they are getting and why they are important. The feedback we have got from these has been especially positive, indicating that we really manage to bring their benefits to life.
If you would like to find out more about how Chase de Vere can help you use employee benefits to retain and engage your clients, help you communicate those benefits or provide services like benchmarking then please don’t hesitate to contact us.
The information contained within this article is for guidance only and does not constitute financial advice.
Content correct at time of writing.