Managing and reducing employee turnover is a critical concern for many businesses. It potentially impacts productivity, morale, and overall company performance. While the reasons behind employee turnover vary, companies can adopt proactive approaches to address the issue before it becomes a significant challenge.
Why is There Employee Turnover?
Employee turnover refers to the rate at which employees leave a company. Turnover can be influenced by factors such as personal life changes, the desire for higher compensation and benefits, and the pursuit of career advancement. While not all of these factors are inherently negative, they can often have detrimental effects on a company as a whole. A study by the Harvard Business Review reveals that 30% of new hires leave their positions within the first 90 days. Beyond the obvious loss of talent, this high turnover rate has significant repercussions for companies in all industries, and those repercussions can be costly.
The High Cost of Employee Turnover
Between recruitment, hiring, and onboarding expenses alone, the financial implications of employee turnover are considerable. Forbes estimates the average cost of onboarding a new employee at $1,400, and losing an employee can result in costs ranging from half to twice that employee's salary. To address employee turnover, organizations should prioritize strategies that consider job satisfaction, employee engagement, and retention.
How Earned Wage Access Can Prevent Employee Turnover
One effective solution is adopting Earned Wage Access (EWA), a financial wellness benefit that allows employees to access their earned wages before the scheduled payday. The adoption of EWA has proven effective for companies in reducing employee turnover, as it contributes to a content and productive workforce and ultimately decreases turnover rates.
Access to earned wages often leads to increased job satisfaction. Employees are more likely to stay with an employer that prioritizes their overall well-being. According to a report from Purchasing Power, 80% of full-time employees consider employer benefits crucial in influencing their decision to stay in their current job.
While employee turnover may sometimes be unavoidable, understanding the underlying factors is essential. Exploring powerful solutions, such as Earned Wage Access, can contribute to creating a more financially secure workforce and increasing employee retention. If you’re ready to explore EWA, chat with one of our Rain experts today to learn more.