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How to Reduce Employee Turnover & Absenteeism

Jun 12, 2008
Does your organization struggle with employee turnover and absenteeism? Is your company wasting time and money on bad hiring decisions? This article is designed to provide you with some useful tips for hiring reliable people. Specific job requirements may vary; however, the following information includes helpful and important guidelines from which every organization can benefit.

Employee turnover and absenteeism is inevitable. But when these things become excessive they can quickly put a business into the red. The cost associated with employee turnover and absenteeism is easy to overlook or ignore because they often go unrealized. Employee turnover and absenteeism have obvious costs that you can track, but the actual costs take a greater toll.

Are you frustrated by the costs associated with employee turnover and absenteeism?

A fundamental issue that managers need to understand in regards to employee turnover and absenteeism is the connection between the two. Extreme cases of employee absenteeism can sometimes be an early predictor of who is likely to leave the organization, resulting in employee turnover.

Let's take a look at each issue, how they can affect your organization and how you can reduce their instances to save your company time, money and resources.

Employee Turnover
Dissatisfied people change jobs at an alarming rate. U.S. Bureau of Labor statistics report that "job hoppers make up 39% of the work force." Many new employees do not become fully productive until they've been oriented, properly trained and gain experience in the company - a process that usually takes several months. The time, effort and money invested in a new employee are lost when they walk out the door and leave their job.

Costs related to employee turnover can reach 150% of annual compensation for employees and 200% to 250% of annual compensation for managerial and sales positions. A mid-sized company of 1,000 employees with an annual turnover of 10% stands to experience $7.5 million in related costs!

Employee Absenteeism
Organizations with high employee absenteeism and reliability issues cannot function efficiently. The expense of employee absence, along with last minute no-shows, is a big financial burden for businesses.

So what counts as an absence? An absence refers to time an employee is not on the job during scheduled working hours, except the leave has been granted (holiday, vacation time etc.). On average, a day of absence can cost an organization $610 per employee. The average annual costs associated with employee absenteeism can range from an estimated $60,000 for small employers to over $1 million dollars for large companies.

Ask yourself the following questions:

- Would you like to know in advance if a job candidate is going to have the kind of work ethic and reliability you've come to expect?
- Would you like to be able to predict issues with substance abuse and employee theft in advance of hiring someone?
- Would you like to know if the candidate is going to be a good fit for the job and your company?

If you answered 'yes' to any one of these questions, we can help. Download the rest of this guide on our site listed below.
About the Author
Nancy Ness is Vice President of Profiles Incorporated, authorized dealer for Profiles International assessments. Profiles is the world's leader and innovator in designing human resource management tools for selecting and developing high-performance workforces. Visit us online at Profiles Incorporated.
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