This is a series that continues Trinity’s May 17th article related to the labor market. In this 1st part of this series of articles, I’m focusing on turnover & its cost to employees.
The Bureau of Labor Statistics reports that there are now over 9 million jobs unfilled in the U.S.—up from 8.2 million’s prior report. This represents the highest number since the BLS started its reporting in 2000. Without talking about the reasons for so many vacant jobs (which I will do at a later point), the demand for workers far exceeds their supply.
- This has multiple implications, which I will also talk about in a subsequent article in this multi-part series.
Based on the last “normal” year (that being 2019), Mercer reported a U.S. average turnover rate to be 22%, with 15% of that being voluntary, 6% being involuntary & 1% being retirements.
- Suffice for now for me to say that as a result of the current supply & demand imbalance:
- With the economy rebounding, employees have choices & are taking advantage of those choices—after being afraid to leave for the last eighteen months.
- A Robert Half survey reports that 38% of workers say they have felt stuck in their careers since the pandemic began.
- According to several surveys, it appears employees are ready to leave their current jobs behind in 2021, right along with the pandemic restrictions we’ve all had to live with for so long. The numbers range from 26% to 40%
- We can expect to see more voluntary turnover.
- Employees are in control of the employee – employer relationship.
- Employers need to not accept this reality & listen to employee preferences & expectations, but also need to take action.
- If not, they will almost certainly be dealing with an insufficient supply of the talent they need.
- They’ll also incur significant expenses in order to replace exiting employees.
- With the economy rebounding, employees have choices & are taking advantage of those choices—after being afraid to leave for the last eighteen months.
The Society for Human Resources Management (SHRM) estimates organizations can pay six to nine months of a worker’s salary to replace them.
- Replacement costs include recruiting and training.
Let’s look at those estimates in terms of dollar costs associated with
| Job Level | Annual Pay | # of Months of Pay | Estimated Cost to Employer |
| Low | $ 40,000 | 3 | $10,000 |
| Middle | $ 70,000 | 6 | $35,000 |
| Management | $100,000 | 9 | $90,000 |
We all know that meeting or exceeding the expectations of our customers/clients is a much better outcome that having to secure new ones. The same thing is true with respect to our employees.
FOR MORE INFORMATION ON HOW TRINITY’S TEAM OF CONSULTANTS CAN HELP YOU WITH RECRUITING, RETENTION OR PEOPLE-RELATED MATTERS:
- E mail Trinity at info@TrinityHR.net
- Visit our website at www.TrinityHR.net
- Call us at 856.905.1762 or Toll Free at 877.228.6810
Author: Salvatore LoDico, Trinity CEO (aka “The HR Godfather”)
YOU HAVE HR CHALLENGES…TRINITY HAS SOLUTIONS!