Employee turnover is one of the most frustrating realities of running a business. No matter what industry you’re in, people are the backbone of almost every company. Whether it’s the knowledge or skills they hold, the experience they’ve developed throughout the role or the unique insights they bring, losing an employee is costly. One of the main roles of the HR team is to maximise employee satisfaction in an effort to both improve their productivity and retain them within the business. After all, when a worker leaves, replaying them is costly in terms of both time and money.
The real cost of employee turnover
According to research, it costs around $18,982 on average to hire one employee in Australia, and it scales depending on the seniority of the position. This figure is likely to be significantly higher now since the last research was conducted. That’s a lot of money to be paid every time someone decides to leave. This includes advertising, interviewing, screening and any direct cost associated with replacing an employee.
These costs are also potentially more impactful for industries with a higher proportion of hourly workers, such as retail and hospitality. While the cost to hire is lower, so is their pay scale, meaning that the cost to hire is a larger percentage of their total compensation. Furthermore, these industries are much less likely to retain staff, making the management of staff replacements an almost everyday task in some way.
There are also many unseen costs that add to the equation. For example, when a new employee starts, they need to undergo training, almost always underperforming in terms of productivity until they get up to speed. Employees leaving also have a broader impact on their team’s morale. It’s estimated that these costs may add up to even more than the direct cost, depending on the position.
Here’s an easy to implement solution that employees love
There’s a lot a business can do to encourage employees to stay and thrive. One of the least sustainable methods, however, is increasing the pay packet. Sure, more money is attractive, but it comes out of your bottom line. Fortunately, there is a myriad of other employment benefits that are just as appealing in the current environment. Work-life balance and HOW workers get paid are two of the top ones.
Earned wage access (EWA) is an increasingly popular offering smart employers are offering their workforce to improve the flexibility and choice employees have in how they get paid. For workers that run a tight budget and are often thrown into short-term debt by unexpected expenses, the idea of having access to their earned pay before their next payday is a massive bonus. In fact, 89% of surveyed workers would be willing to work more hours for an employer that offers EWA.
Providers such as Paytime give your access to their earned wages through a convenient mobile app. It’s easily worked into your existing payroll system, avoiding any disruption to your usual processes. When an employee wants to access some of their earned income, they will be charged a small, fixed fee (less than the cost of a cup of coffee), and Paytime will deduct the amount from their next paycheck. It’s a low-cost employee benefit that promotes reduced employee turnover, saving your business time and money.
For more information about how Paytime can help retain your workers by giving them the tools to better manage their pay and finances, contact Paytime today.
