In a recent study by PeopleMetrics, Engagement Strategies’ preferred research vendor, they discovered that turnover in the highest engaged departments of a financial services firm they surveyed was at 6% versus 10% in the departments with the lowest engagement. According to PeopleMetrics’ data, the cost of turnover is about 1.2 times the average annual salary (to account for recruitment costs, hiring costs, training costs, lost productivity, etc.). In this specific example, the average annual salary was $35,000 for a company of 5,000 employees. That means, a 1% decrease in voluntary turnover equals about $2 million in savings. And, by moving from 10% to 6% turnover through a focused employee engagement strategy, this organization could save around $8 million.
August 23, 2010