Employee Turnover Could Cost $2 Trillion

The Solution May Lie In Recognizing Employee Efforts

According to recent study by Cornerstone OnDemand and Harris Interactive, as many as 21 million Americans may be planning to change jobs over the next year. With the cost of employee replacement tallying as much as 250 percent of salary, U.S. businesses may be faced with turnover costs as high as $2 trillion in 2012.  The study also revealed the extent to which an employee feels valued and sees the company helping him/her succeed professionally can have a profound effect on the decision to seek new employment.[1]

Escalating workplace demands of recent years have created environments where employees don’t feel that they are sufficiently valued by business leaders. Companies seeking to avoid turnover need to consciously recognize employee efforts and empower them to perform well in their roles. Tactically, these organizations need build connections among employees by honoring teams, supporting initiatives that provide a healthy work-life balance and foster open communication so employees know the stakes involved in their actions. Providing multiple channels for timely and sincere recognition can help build trust and appreciation throughout the organization.

Studies show that employees who receive the recognition they want are more engaged and more willing to put in discretionary effort.  A 2010 Maritz Research poll of 1002 full-time employees across North America asked employees how they were recognized in the workplace, versus how they wanted to be recognized…..The results showed that when employees received the type of recognition they wanted, they were significantly more satisfied with their jobs, more likely to remain with the company, and more likely to recommend their workplace to others.  They were also significantly more likely to invest in their own company and felt significantly more valued as an employee…In most cases, the intent to remain with a company long-term is doubled when employees receive their desired form of recognition.[2]

A well-designed recognition program that conveys a message about the value of the individual can go a long way toward staving off the inevitable loss of talent and allowing an organization to seize emerging business opportunities by leveraging the human knowledge and talent that make up as much 85 percent of a company’s assets.

[2] The Power of Meaningful Employee Recognition: Why One Size Does Not Fit All, Rick Garlick, Ph.D., Maritz Research, downloaded Feb. 11, 2010.

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