Employee turnover a costly problem for Canadian businesses

Corporate culture, one of the main reasons why employees leave

Average annual cost of employee turnover

Average annual cost of employee turnover

Average annual cost of employee turnover

TORONTO, 08 Dec. 2021 (GLOBE NEWSWIRE) – Canadian businesses are not only struggling to find workers in one of the tightest labor markets in recent history, but they are also finding it increasingly difficult to keep employees they already have, according to a survey by The Harris Poll commissioned by Express Employment Professionals.

One in four hiring decision makers (24%) say staff turnover has increased in their company this year compared to last year.

Every year, employee turnover costs businesses an average of $ 22,279 in recruiting costs and lost productivity, with 18% saying it costs their business $ 50,000 or more per year. This burden increases with company size, as 35% of large companies with more than 100 employees report that it costs them $ 50,000 or more per year, while only 3% of smaller companies (2 to 9 employees) say the same thing.

Beyond the financial impact, more than two-thirds (68%) say staff turnover places a heavy burden on existing employees who have to take on extra work left by vacant positions.

Among companies that have experienced an increase in employee turnover, the most common reasons are more opportunities for advancement elsewhere (42%), vacancies have increased due to employee resignations (40%) and better wages / benefits offered elsewhere (37%).

Staff turnover is expected to remain high in the first half of the coming year, according to KV Aulakh, owner of an Express franchise in Barrie, Ont.

“One of the main reasons for turnover is that many employees have experienced changes in responsibilities and been placed on an additional workload without an increase in pay,” said Aulakh. “In addition to inflation, which has led to an increase in the cost of living and a labor shortage, many employees are looking to go where they can get the most pay, benefits and flexibility. . “

Dan Purdy, owner of an express franchise in Abbotsford, B.C., believes that as more businesses return to work in person and resume more normal operations, high employee turnover will slow down. . But for now, he agrees with Aulakh that turnover is high because workers know the market is tight so they can earn better pay.

“Most British Columbians I know who are changing jobs right now are doing so for a quick pay raise; why wait for the annual adjustment of 2 to 3% of the cost of living when they can increase their wages by 10 to 15% with a new job? Purdy said. “Many employers are desperate for workers during this shortage, so they’re willing to raise wages or pay shift bonuses to sign new applicants. Several industrial clients even sponsor diplomas, certificates, and other in-house mobile equipment testing to attract workers eager to improve their resumes.

Staff turnover is such a big issue for businesses that Express has created a Turnover cost calculator for employers, which Purdy says is a useful tool in helping employers understand why they need to act quickly to fill vacancies.

Higher wages and better benefits aren’t the only reasons employees choose to leave. Aulakh and Purdy both say corporate culture is one of the main reasons.

“The corporate culture is extremely important because you can bring in someone with a high salary, but to keep them there you absolutely need a positive, fun and inclusive corporate culture,” said Aulakh. “Employees shouldn’t be afraid to come to work every day and, especially in this tight labor market, companies need to go the extra mile to keep their valued employees. “

Purdy agrees that “corporate culture is often the number one reason given in exit interviews for why people join and leave companies. Express employment Commit to retain The training program addresses two key elements of an effective employee retention strategy: the effective onboarding of new employees and the importance of continuous development. “

In terms of what businesses can do immediately to help reduce employee turnover, Aulakh says companies need to look at the whole package.

“Perform a financial analysis of the company to understand which employees play an important role and make sure those employees are paid correctly,” Aulakh said. “Hold regular meetings with staff to find out how everyone feels at their workplace and try to micromanage as little as possible while still providing flexibility and a work-life balance. “

It is important for managers to recognize their staff as unique individuals who react in different ways to different situations and circumstances, ”said Express CEO Bill Stoller.

“A healthy corporate culture has many benefits for a business, some of which can ultimately affect bottom lines,” said Stoller. “At a time when inflation is pushing commodity prices higher and higher, companies cannot afford to add the high cost of turnover as well. “

Survey methodology
The survey was conducted online in Canada by The Harris Poll on behalf of Express Employment Professionals between March 23 and April 12, 2021, among 505 Canadian hiring decision makers (defined as adults aged 18 and over. more in Canada who are employed full time or in self-employment). -employees, work in companies with more than one employee and participate fully / meaningfully in hiring decisions in their company). The data have been weighted, where appropriate, by firm size to bring them closer to their actual proportions in the population.

If you would like to arrange an interview to discuss this topic, please contact Ana Curic at (613) 858-2622 or by email [email protected].

About Bill Stoller
William H. “Bill” Stoller is President and CEO of Express Employment Professionals. Based in Oklahoma City, Oklahoma, the international recruiting firm has more than 830 franchises in the United States, Canada, South Africa, Australia and New Zealand. Since its inception, Express has employed more than 9 million people around the world.

About Express Employment Professionals
At Express Employment Professionals, we’re in the people business. From job seekers to corporate clients, Express helps people thrive and businesses grow. Our international franchise network provides localized recruiting solutions to the communities they serve in the United States, Canada, South Africa, Australia and New Zealand, employing 526,000 people worldwide in 2020. For more for more information, visit www.ExpressPros.com.

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