Imagine if there was something lurking in your business that was costing you hundreds of thousands to millions of dollars every year, was detrimental to your company culture, and negatively impacting every facet of your business. You would probably spring to action to fix it right?
Well, Millennial turnover is that “something”.
Yet, when I talk to CEOs, business leaders, and partners at law firms, they often seem unaware of the extent to which Millennial turnover impacts their business. When we talk about Millennial turnover, we are talking about historically low retention rates of young talent across industries that cost mid to large sized companies and firms millions of dollars a year and billions of dollars to the US economy. Millennial turnover is not something for CEOs or industry leaders to grumble about and sweep under the rug. It negatively affects company culture, staff morale, innovation, productivity, and every other aspect of a business. The total impact on your business may astound you.
Direct Costs of Millennial Turnover
Millennial turnover costs the US economy $30.5 billion dollars every year. Yes, each and every year.
For individual businesses, the news is just as bad. Currently, millennials make up one-third of the workforce, and 36% of them say they expect to leave their current employer in the next 12 months. And in the US, each of those employees that is currently scrolling through job boards at their desk generates on average of $150,000 of revenue per year for their company.
And once those Millennials leave, they need to be replaced. That replacement process includes advertising costs, interview costs, training costs, and a host of other onboarding related costs. Depending on the industry, these direct costs of replacing millennial staff can add up to anywhere from $15,000 at the low end to 50% to 200% of an employee’s annual salary at the higher end.
Can you say “OUCH”?
Those are staggering numbers. And with Millennials continuing to enter the workforce over the next few years and Gen Z on the workforce horizon, the direct costs associated with employee turnover may increase.
Those are only the direct costs.
Indirect Costs of Millennial Turnover
What happens when an employee leaves?
For starters, their work still needs to get done, and it is usually passed on to other staff. This is often a source of stress for their ex-colleagues who are responsible for picking up the slack. In the paper The Impact of Staff Turnover on Workplace Demands and Coworker Relationships, the authors outline the problem for ex-colleagues clearly:
“…Turnover causes financial strain on organizations while they recruit and train new employees… disrupts organizational efficiency…can threaten the implementation and sustainability of new initiatives… likelihood of turnover among remaining staff increases when stress is high and coworker support is low…”
Let’s appreciate what the authors are saying for a second. Millennial turnover causes increased financial strain, decreased efficiency, disruption of new initiatives, and increases in turnover of the staff who are still working there.
Basically, Millennial turnover negatively impacts every imaginable aspect of a business or company.
And don’t forget, even once the Millennial moves on, you are not out of the woods yet.
The people who replace the Millennials who leave your company need time to get onboarded, trained, and brought up to speed before they can start contributing at max efficiency. This process can take between three and seven weeks according to a Millennial Branding survey, causing months of suboptimal performance.
Once CEOs and business leaders realize the extent of the Millennial turnover issue, it is as if they just realized their gas tank has had a giant hole in it for the last 20 miles. They jump to action, asking us at Launchbox365 to help them to reshape retention and engagement..
And through the new training and development needed: coaching and mentorship from the inside-out, our team is able to to help them connect with their Millennial staff and provide the professional development and work environment and experience Millennials crave, reducing their Millennial turnover.
But the first step to getting help is admitting you have a problem. Business leaders must first appreciate Millennial turnover for what it is: a million dollar issue that negatively impacts every aspect of their business.
What about you? Got this issue?