Budgeting for Development: The Cost of Employee Turnover

When it comes to budgeting for leadership development, the innate value of cultivating and retaining talent cannot be overstated. Many companies invest substantial resources - including time, energy, and money - into their leaders and employees, but what happens when these assets walk out the door? Any time a team member leaves a company, it impacts productivity, morale, and the bottom line. To help you learn how to reduce the chances of having a high employee turnover, we will dive deep into the world of budgeting for development. 

What Is at Stake?

Let’s take some time to truly understand the gravity of employee turnover. According to a recent study, companies across the United States lose an average of $1 trillion per year due to employee turnover. If that number sounds outlandish to you, let’s break it down.

Built In reported that the annual employee turnover rate was at a whopping 47.2 percent as of 2021. LinkedIn states that replacing an employee can range between one-half to two times the employee’s salary. So, what can be done to keep employees and mitigate this type of financial burden?

Fostering Leadership & Employee Retention

Development Investment: Company development is a never-ending task. It isn’t something that is done once and never thought of again. The best strategy is to allocate the proper resources for regular training, workshops, and even one-on-one coaching sessions. Growth is important, and all employees need to feel as though they are continually engaged and committed to their roles within your business. 

Positive Workplace Environment: Open communication, reward systems for meaningful contributions, and opportunities to move up are all things you can implement to cultivate a positive workplace culture. 

Growth Trajectories: Most employees - even those in executive or management roles - will leave if they feel like they can no longer grow within their current position. The best way to mitigate this challenge is to provide clear career paths and advancement opportunities. This will enable your team members to see a long-term future at your company. 

Plan for Your Company’s Future

As a leader, taking proactive measures to improve employee retention rates is crucial to the survival of your business. Here are a few questions you can ask yourself to get started. 

Do you have any current strategies in place to measure engagement levels among your team members?

From the employees who have left in the past, have you noticed any patterns or similarities in regard to their reason for leaving the company?

Are you providing support or mentorship to cultivate a better sense of belonging among your employees?

Here at Leadership Delta, we are dedicated to empowering leaders and helping them succeed. The landscape of employee retention is an intricate one, but we strive to equip you with the tools needed to cultivate the best work environment possible. Budgeting for development isn’t just about money. It is also about strategic investments, long-term benefits, and happy team members. The cost of having a higher employee turnover rate can take a company down, but you can minimize this risk by implementing the tactics above. 

Connect with us today to learn more about becoming the best leader you can be.