Many People & Culture (HR) teams must make a compelling business case to secure a budget for their employee listening programs. Those in this situation need look no further than turnover data to make their case.
Some employee turnover is normal, expected, and even necessary to ensure any workforce adapts, brings fresh perspectives, and yields new innovations. But excessive turnover can lead to dips in productivity, morale, and overall financial health.
In 2023, 17% of employees participating in Newmeasures engagement surveys planned to leave their organization in the next 12 months. Simple math illustrates just how big of a problem this is. For a 2,000 person organization that means 340 employees were at risk of leaving voluntarily. Clearly, this degree of turnover would create significant financial cost and disruption to organizational performance.
Employee listening programs enable organizations to proactively identify and address the factors that drive unwanted turnover, rather than simply reacting to issues after talented employees have already left or are on their way out the door. There are many different forms of listening including informal (e.g., townhalls, listening tours, and 1:1 conversations) and formal methods (e.g., onboarding, engagement, and exit surveys).
Data from employee listening can enhance your organization’s retention strategy by guiding leaders on where to focus and what to prioritize. Armed with these insights, leaders can focus on improving key areas to keep qualified employees in the organization, thereby reducing the costs associated with turnover. For example, an analysis of our 2023 client data showed that employees were considering leaving due to five main reasons:
On the flip side, survey data can show which employee experience topic areas are predictors of stay intentions. Our data indicate that the items driving retention most are:
Knowing what issues are driving intent to leave and intent to stay enables organizations to pinpoint actions they can take to increase both engagement and retention. (For some examples of actions, check out this article from Qualtrics)
An added benefit of formal listening through surveys is that the resulting analytics allow organizations to identify populations or cross-sections of employees who are most at risk of leaving. By utilizing demographic data, we can identify those at high-risk for attrition and answer questions such as:
One way to demonstrate the value of investing in employee listening is to show how much money you can save for your organization by using the resulting data and insights to reduce turnover. Our partners at Bonfyre offer a free Turnover Reduction Calculator that makes it easy to quantify potential savings from engagement initiatives.
To use the calculator, you’ll need the following data points:
Let’s consider an example. Company X has 2,000 employees and their average cost to hire one new employee is $13,748. If that organization has 17% of their employees (340) leaving annually, the total annual turnover cost could translate to $4,674,320.
The Bonfyre calculator uses data from Gallup to estimate that companies can expect a 59% reduction in turnover by increasing employee engagement. If Company X were able to use employee listening data to increase engagement and reduce turnover from 17% to 7 %, they would save $2,757,849.
Even if the same company could reduce turnover from 17% to just 10.6% (the general average across all industries), they would lose 212 employees, still resulting in meaningful cost savings of $1,719,600.
HR teams need to show how their efforts will deliver business value for their organization, or they will struggle to get the funding they need to implement a meaningful employee listening program. A well-constructed business case allows you to tell a powerful story about how employee listening will influence the outcomes your organization cares about. Forecasting the financial impact of turnover reduction is the simplest way to demonstrate savings to the bottom line and get the attention of budget holders.
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