Any company will say that a strong team is its greatest asset. Employees make the basic framework for any organization. If a CEO wants their organization to be successful, investing in its employees is extremely important. Companies that invest in employee experience and culture have a higher retention rate than the ones that don't. Having budgets for employee events, gifts, bonuses, time off, food, and more contribute to a positive culture and employee experience.
Dissatisfaction, lack of motivation, weak company culture, and lack of engagement leads to a higher turnover rate. While it may seem as if employers are saving money, in reality, companies lose millions of dollars on rehiring and delayed productivity. How you may ask?
Studies by the Center for American Progress found that the average turnover of an employee cost about ⅓ of the worker's salary. A highly skilled long-term employee can cost the company up to 200% of their salary. The costs begin with re-hiring. The average cost of a new hire is around $4,129. Cost of training and onboarding a new employee can come up to $1,000 but also have negative effects on other employees’ productivity levels. The cost of development depends on the job and task, on average it takes up to 6 weeks for an employee to get fully ramped, while it may take months for a highly skilled role. Lastly, the cost of vacancies can add up, which puts more pressure on other employees or can delay the initiatives in progress by months.
The industry turnover rate for the technology sector is 13% (LinkedIn). For a 1,000-person company what is the true cost of losing 130 employees/year?. On average, it costs $4,000 for hiring, $1,000 for training, $15,000 for development, and $30,000 in lost productivity from vacant seats. Accounting for the true costs of replacing talent, this is an astronomical expense at $6,500,000 per year.
While having a 100% retention rate is ideal, in reality, bringing down the turnover rate by just 2% would save your company $1,000,000 in this setting.
Employee disengagement is often linked with company culture. Slow work, lack of interest, and no connection to company values are the biggest reasons employees lose interest in work and provide minimal output. Quiet quitting has been a buzzworthy phrase as of late and highlights the increase in disengagement. There are several causes of employee disengagement, and a major factor is a lack of culture and belonging.
Positive workplace culture drives engagement, attracts talent, and increases satisfaction. This leads to a sense of belonging which affects performance. Without this, employees leave the organization. High turnover can cost the company a lot of money and impact overall morale. Every time there's a vacancy, it causes employees to fill in the spot temporarily which can affect productivity. Making sure employee morale and engagement are high can lead to higher retention rates and productivity.
Employers must create new strategies to make it more inclusive and improve engagement. Workplace benefits need to match the demands of the field. Any form of a competitive edge will attract top talent. Lack of retention can have a negative impact on the company as employers need to constantly onboard new employees. Replacing an employee can cost up to 150% of an employee’s base pay and it takes an average of 28 days to get a new hire. This is close to a month's worth of productivity lost, before factoring in ramp-up time of a replacement hire. Employee perks such as student loan repayment assistance, free meals, gym memberships, transportation, and more can improve engagement. These benefits help employees reduce financial burdens and create an incentive for employees to stay longer at the company. The best places to work focus always focus on the following:
One way to improve the retention rate is through internal events that drive a sense of belonging and community. Having a robust offering of social, learning, and inclusivity-based programming appeals to individuals needs for personal growth, self-actualization, and respect. Epoch helps increase employee engagement and scale these offerings by streamlining and centralizing event management. Making it easier for employees to access events that drive their sense of meaning in your organization. Company events drive the employee experience, increasing productivity and connection with the organization’s culture and amongst employees.
Employee events are one step toward lowering the turnover rate. However, ensuring events are engaging and relevant is crucial. Communication is key to a successful event, many employee events go unheard due to a lack of communication or no notification. Epoch on average has increased event attendance by 62% within 1 year by making sure events are automatically notified to employees by messaging tools, email, and calendars.
Enabling managers and employers to streamline events so they can facilitate more high-value employee experiences is critical to driving engagement. Managers spend a lot of time creating and and broadcasting events to drive this engagement. Epoch automates these repetitive, yet crucial tasks that drive engagement and allow managers to focus on the quality of the event itself.
Epoch helps with employee events and engagement. The data above shows how Epoch has drastically increased engagement over the span of 1 year. Stronger employee culture and engagement create a more purposeful work environment. This increase in engagement and activity helps with employee retention, saving thousands of dollars in turnover-related expenses.
Employee engagement is crucial to all businesses. Having an employee experience strategy and events in place help keep employees engaged and increases the retention rate. Employee experience is directly linked to a better work environment, quality work output, culture, reduced staff turnover, increase in productivity, and ultimately company success. Epoch can help with this. Book a demo today.
The Employee Experience role has become one of the fastest-growing roles over the last five years.
Here are some insights we’ve gained into average spend per employee and budgeting strategies.