$30,000 - $40,000 per employee.
That’s what it costs to replace an average worker making around $60,000 per year, according to SHRM.
It varies widely of course. They estimate that it costs 6-9 months of most employees' salary to replace them, but that can go up or down depending on their position. For example, minimum wage workers may only cost 10% to replace but C-suite executives will hit you for 213% of their annual salary!
Let’s crunch some real numbers. The Bureau of Labor Statistics says that U.S. workers averaged about $51,000 per year in the fourth quarter of 2020. That means it’s going to cost at least $25,500 to replace them.
Of course, that’s just for one employee.
The average separation rate in the United States in 2019 was 22%. That varies by industry, of course, but this gives us a good starting point. If you have a 100 person company, you could expect to replace 22 of those people in just one year. Assuming they each make the national average salary, that’s a whopping $561,000 in turnover cost! If any of those 22 you’ve lost are managers or, worse, C-suite then you are in for an even bigger hit to the bottom line.
How do you claw back those losses and turn it into profitability?
It starts with your people. They have to not only WANT to stay, but they must be empowered to do a good job. Not mediocre. Not average. Not passable. A GOOD job. And, if possible, a great job.
That’s easy to do when you have the right system in place. It needs to connect your employees with their coaches in a way that enables everyone, including the company, to win.
Ronn Cort, President of Sekisui/Kydex, and his team
- Waiting list for applicants, minimal turnover, successful promotions, and record breaking production -
There are Catalytic Coaching customers that have cut their attrition rate in half! Others have a line out the door of applicants and no one is in a hurry to leave the company. What was their secret?
!. Switch up the seats. Not everyone is ideally suited to the position they were hired into. They may do a decent job, but eventually their lack of skills or drive will begin to show in your profit margins. You can’t force a fish to pick apples. A good coach can match their team member’s skills and aspirations up with what the organization needs.
2. Get the tools for the job. No matter what the job is, it’s made infinitely easier when you have the correct tool for it. That is as true for plumbing as it is for performance management.
That tool should facilitate frank conversations between a manager and their direct report that speeds the pace of significant change and grows the company while developing greater potential in that employee, all while not overwhelming them. Sounds like a tall order? It can be with the right process. This is what Catalytic Coaching is designed to do.
3. Enable your managers. Their coaching will become the vehicle through which you’ll cascade company initiatives, develop your workforce, and increase profitability. Be sure they have the training and support they need to make that happen. Through Catalytic Coaching, there is not only the implementation training; but ongoing free webinars, micro-workshops, and Coach2s.
A Coach2 is a certified coach of coaches from your organization that is given in-depth training, preparing them to be the process champion. They’re uniquely qualified to help your managers become the best coaches they can be.
Don’t have a Coach2 right now? Or maybe you just need more Coach2s to properly support your managers? We have our next virtual Catalytic Coaching Mastery Program coming up in May! Seating is very limited to provide each attendee with the time and attention they deserve. Don’t wait to reserve that seat!
It’s time to stop losing money on lost employees.
It’s time to invest in a Coach2!
Garold (Gary) Markle is the creator of Catalytic Coaching and author of Catalytic Coaching: The End of the Performance Review. He brings real world experience from 17 years in HR leadership in major corporations coupled with 20 years of teaching small and mid-sized organizations how to cultivate their leadership and ditch their detrimental performance reviews for a proven Coaching process.
Book Gary to speak to your audience about speeding your pace of significant change.
