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San Francisco Business Insurance: The Cost of Employee Turnover

San Francisco Business Insurance The Cost of Employee TurnoverSan Francisco Business Insurance: The Cost of Employee Turnover

Employee turnover has obvious disadvantages and costs. It is a distraction, an inconvenience and oftentimes a hassle for business owners. But how much does it cost San Francisco business owners?

When an employee leaves, not only does it take time and resources to find and train a new one, but there are multiple hidden costs you may have not considered.

Training & Recruitment. On average, it costs businesses about one-fifth of a worker’s salary to replace them. So, for an employee making a yearly salary of 50,000, it would cost $10,000 to replace them. And, the costs only increase as the job skills and education levels increases.

There is a general consensus that high turnover, low-paying jobs are slightly less expensive to replace, as they only cost 16% on average per employee. However, the costs can add up quickly when a company has a high turnover rate. For example, 37 percent of hotel/motel and food services employees voluntarily quit their jobs in 2011. With a 37% turnover rate, turnover can become a significant business cost.

Employee morale. Turnover has an impact on the group. Co-workers need to pick up the slack, managers need to find replacements. If the circumstances of turnover were less than ideal, there might be lingering conflict, or power struggling to determine who fills in the open position.

Lost credibility. This can be twofold in a company. Management can lose credibility when they create an environment with excessive turnover and existing employees can become demoralized and move on.

As a San Francisco business owner, what are your tips for reducing employee turnover? We’d love to hear from you.

DiNicola Insurance Services serves the San Francisco Bay area business communities, providing comprehensive insurance programs, risk management strategies, and employee benefits. Our goal is provide you with forward-thinking solutions designed to protect you, your staff, and property against losses while also assisting you in mitigating risk. Contact us today for more information about our San Francisco Business Insurance policies(855) 247-1912

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