Employee turnover is one of those unfortunate factors that all workplaces face at some time or another. When employees leave jobs during the first few months, it can be a sign that things need to change. This can be either a revised recruitment strategy or improvement of the compensation and work environment.
Why turnover happens in finance
Most employees leave simply because they have grown unsatisfied with the work they do, or the company has not met up to their career expectations. In the finance world, this happens often as employees get burnt out or feel like they are in dead-end jobs. The US Department of Labor statistics for the second quarter of 2015 indicates that as many as 2.7 million workers quit jobs in April, and that, “quits increased in several industries, with the largest rises occurring in durable goods manufacturing; finance and insurance; and health care and social assistance.”
It has been estimated that as many as 70 percent of employees are unhappy at some point in their careers. A recent Gallup poll found that, “actively disengaged employees cost the US $450 to $550 billion per year.” Finance and accounting professionals may be more susceptible to this because they work long hours, often on tedious projects, and they have seasonal ups and downs that can interfere with other aspects of their lives. Just ask any CPA what the tax season is like for them, and you get the idea.
What does it cost a company when a finance employee leaves or when there is frequent turnover in these roles?
To answer this question, one must first understand turnover costs for all types of employees. Most experts believe that a single employee turnover costs a company between 50-to-200 percent of that employee’s annual compensation. This includes the costs to recover lost productivity, source and select a replacement hire, and the potential lost revenues from losing an employee. When most finance employees are earning from between $40-120K per year just in salaries, and managing large financial accounts- the costs can range from $20-240K per lost finance employee.
To gain a better understanding of what it may cost you to lose finance employees to turnover, here is a free calculator offered by the Center for Economic and Policy Research.
To reduce the costs of turnover, look to the support of a financial recruitment firm like Venteon technical staffing. We have many quality accounting and financial candidates who are pre-screened, trained, and ready to go to work for you now.