The Hidden Costs of Employee Turnover

Welcome to our Learning Community.

“We don’t care!” This is a quote from the CEO of a fairly large Licensed Marijuana operation. She continued “I’m sick of hearing about building culture and positive employee engagement. We are making good money and if an employee doesn’t like working for us, there’s plenty of people to take their place.”

Unfortunately, we hear that same sentiment often. And for some operations, that attitude probably won’t change. For those that truly care about their teams and the “bottom line”, they understand that the culture of an operation does matter.

Employee turnover will negatively impact your customer experience and profit margin.

For those of you who like data, here are some facts about employee turnover you might enjoy:  

• The average time to hire a hospitality worker is 21 to 45 days
  (about 1 and a half months).

• The average number of calls and interviews per hire is 14. 
  That’s 14 different times you’ve interviewed potential candidates before hiring one.   

  That doesn’t even account for the cancellations and no-shows. Nor does it include the time and energy that has gone into organizing an interview with multiple parties only to have it delayed again and again.  

• Employers spend an average of 33% of a worker’s annual salary to replace just one employee.

Let’s put that into perspective:

It will cost $12,000 to replace an entry-level employee making $36,000 a year.

It will cost $20,000 to replace a manager making $60,000 a year.

These are significant numbers. While this data may not be exact for you, it should certainly be factored into your “human capacity” budget. But most businesses don’t understand the turnover impact and it is never in their budgets.

Employee turnover does impact your operation. And a positive work culture will reduce your turnover rate and improve your customer experience. That’s like extra money in your pocket!

Teams realize exponential results when individuals’ talents and passions perfectly collide with their roles.
-Scott Miller

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At The Advisory Academy, we not only help you simplify Regulatory Compliance, but we are also currently creating Learning Paths that address Operational Culture and Leadership development.