It’s a trend HR professionals all over the country are seeing: job hopping. It’s a shift in mindset that may have been spurred by the economic downturn about ten years ago, but it’s showing no sign of slowing down. This trend isn’t just in recruiters’ imaginations.
Gallup polls show that Millennials, which are quickly making up the largest portion of the workforce, switch jobs more than any other age group. 60% are open to new opportunities, and engagement levels are overall low. This presents a challenge to businesses, since employee retention can mean lower operating costs and a better bottom line. But how could job hopping affect your company’s overall bottom line?
Increased Hiring Costs
Obviously, one of the biggest costs associated with job-hopping is increased hiring costs. There haven’t been any cost analyses that fit all kinds of positions across different industries, but the cost of hiring a new employee can sometimes be more than their yearly salary.
The combined HR costs, time taken away from other tasks to interview candidates, and time spent on getting new employees trained and up to speed add up quickly. The return on investment (ROI) from new hires will obviously increase as time goes on. $40,000 to hire a sales professional who will boost sales for the next 5 years has a fantastic ROI. $40,000 to hire someone who will only stay for eight months? Not so fantastic.
Loss of Productivity
Even putting aside the quantifiable costs of hiring new employees when you lose someone to job-hopping, loss of productivity can be just as costly. When new workers start in their roles, they won’t be as familiar with company goals, policies, and procedures.
High turnover from job-hopping makes this problem worse, since more newbies will be in the office at any given time. Not only are new employees less productive, but they cut into the productivity of more experienced team members, because they (understandably) have questions and may not be sure how to fully perform their job yet.
Teamwork is also affected when team members haven’t yet had time to build rapport and trust among one another.
Reduced Morale & Customer Loyalty
On some level, even if it’s not a conscious level, high turnover affects employee morale. When other team members see their peers leaving (especially in high numbers), it sends a signal to them to reevaluate their own place within the organization. Seeing others job hop can reduce overall morale, leading to lower productivity and even higher turnover.
Customer morale and loyalty can also easily be affected by job-hopping. A loyal customer may get used to working with certain people in your organization, and appreciate the personal attention they get from someone who knows them. Many customers start to get weary if they’re always talking to a new person—a person who might not yet be fully trained. Customer service mistakes are more common within high-turnover companies, partially because much of the workforce is not fully trained at any given time.
What Factors Influence Turnover?
Public opinion on job-hopping may be changing, but recruiters and HR professionals can help add to their organization’s bottom line by reducing turnover as much as possible. Some factors, of course, are out of any one person’s control, but being aware of what makes people stay in a given position can help companies constantly adjust to the needs of their employees and discover ways to keep workers engaged.
Here are just a few ways organizations can positively influence turnover:
- Offer fair or above-average compensation
- Offer opportunities for growth and professional development
- Prioritize a diverse workforce
- Ensure that the organizational leadership team is involved with employees at all levels
- Emphasize communication and transparency
- Invest team members in projects that will engage and challenge them
- Tailor benefits to suit employees’ needs
- Ensure employees receive recognition and constructive criticism when appropriate
While it may seem costly to try to fight back against job-hopping and retain employees long term, the benefits are well worth the expense and effort. The ROI of retaining employees can be enormous. In fact, one study showed that in companies with low turnover, sales were four times as high as companies with high turnover. With those kinds of numbers, it’s time to start focusing on keeping the job-hopping generation engaged to boost your bottom line.
Download the white paper and see how you can create an integrated, engaging employee experience using people analytics!
Image via Pexels.com