0 Comments | Apr 06, 2010

Employee Retention: The Gift That Keeps Giving

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Our recent retention focus has revealed some interesting statistics. For instance, a 100-employee project management firm with $98K average annual employee salary and benefits package outlay, and a 14% annual turnover rate – the industry average – spends over $4.1 million every year replacing employees lost to voluntary turnover.

As we’ve mentioned in other posts, your benefits package plays a monstrous role in the retention equation. Implementing an employee wellness program attractive enough to convince just 1/5 of the employees who would otherwise have left the firm to remain on staff would save the company in this example around $800K the first year.

That’s an impressive first-year cost reduction, but the savings actually increase in the out-years. Keeping one employee happy enough to remain on staff for ten years can circumvent more than five turnover cycles. As the Sasha Corporation notes, the value of keeping an employee is far greater than the cost of replacing one.

This revelation has helped business owners take a more long-term view of their benefits package. See some of their results here.

We’ve also compiled our research into a white paper. It’s a quick read, but the numbers might surprise you. Take a look here.