According to the Bureau of Labor Statistics, the number of U.S. employees voluntarily leaving their jobs has gone up in the last year in a trend known as the “Great Resignation”. This has especially become evident in industries such as professional and business services, manufacturing, and retail. Our team at ReEmployAbility works diligently to provide our clients with the Transition2Work® program. Transition2Work keeps employees connected to their employer and the community while they recover from a work-related injury, and helps to combat these trends and increase employee retention.

Employees dealing with work-related injuries face financial and emotional struggles that may result in a loss to the operations of the company. It is important for their employer to remind them that they are a valued member of the team and that through return-to-work programs such as Transition2Work®, they can have a speedy recovery to get back to work. In most cases, the best choice for an employer is to retain current employees rather than to try and replace and retain them. See for yourself:

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ReEmployAbility’s Transition2Work Return-to-Work program assists participants in increasing the rate of employee retention across industries through service. Read on to learn more about the benefits of employee retention and the costs associated with the loss of an employee:

Replacement Costs

Large U.S. employers spend upwards of $1 trillion dollars on searching and recruiting replacement workers annually.1 According to the new benchmarking data provided by the Society for Human Resource Management (SHRM), the average cost per hire was nearly $4,700.2 Losing a valuable member of the team does not only put a large financial burden on a company, but the organization faces a loss in productivity and overall morale that can lead to a higher risk of liability and potential future misfortunes.

The loss of institutional knowledge, skills, and relationships when an employee does not return to work can take quite some time to replace. On average, it can take a new hire one to two years to reach the productivity level of an existing employee.2 Within that time it is more likely for a new hire to leave the position, or cause injury to themselves due to lack of safety training and equipment knowledge.

Impact on Safety in the Workplace

More than one-third of work-related, nonfatal injuries occur in employees who have been on the job less than a year. These new hire employees are often less experienced in their position, are less familiar with the workplace and the day-to-day hazards, and have received less safety training than long-term employees. If they have yet to become aware of their rights and responsibilities related to safety, new hire employees may tend to feel less comfortable notifying their employer about hazards or unsafe conditions leading to a greater potential risk of injury for them or other employees in their department.3

Human Resources

Employers who invest in improving overall employee retention and addressing turnover risks reap significant rewards. They report sales growth, improved productivity, and work quality, as well as higher employee morale.1 Unfortunately many employers estimate the total cost to hire a new employee can be three to four times the position’s salary, according to Edie Goldberg, founder of E.L. Goldberg & Associates.2 An example would be, for an employer hiring for a job that pays $60,000, you may spend $180,000 or more to fill that role.

About 40% of the cost to replace an employee would be tied to hard costs and the remaining 60% would be soft costs. Hard costs are costs related to expenses incurred due to loss of production, payroll changes due to overtime, and recruitment costs. The soft costs would include the time departmental leaders and managers invest in supporting the Human Resource specific roles of the hiring process.2

Psychosocial Impact

When a vital employee is lost, the company not only faces an economic hit but a disruption in the company culture. Aside from lost connections, employees who remain may have to take on heavier workloads and responsibilities that result in a decrease in motivation and satisfaction. Employees may notice a trend when others are job hunting, talking about quitting or leaving the company, or mention dissatisfaction with management, and decide to leave themselves.1 As employers face more demands for higher compensation, time off, flexible work schedules, and better benefits, a strain is put upon hiring teams that are likely to cause them to lose focus on other duties.2

Employee Satisfaction

Over half of exiting employees (51%) have stated that within the 3 months prior to leaving, neither their manager nor any other department leader has spoken to them about their job satisfaction or future with the organization. In the same study, 52% of voluntarily exiting employees say their manager or organization could have done something to prevent them from leaving their jobs.4

A lack of employee satisfaction may lead to less commitment to their duties and responsibilities, becoming more prone to customer service mistakes — all of which can damage the customer experience. Customers might feel inclined to share their negative experiences, putting the organization’s reputation at risk. A Harvard study explains that a 5% increase in customer loyalty (which is a result of employee satisfaction) can have a 25-85% increase in profits.5 

The Transition2Work Return-to-Work program maintains the employee connection during a period of injury/disability that can improve overall employee satisfaction. As described by many studies, a more satisfied employee can decrease turnover, and increase morale and capabilities that reflect when working with customers, and their colleagues.

ReEmployAbility’s Transition2Work program has proven results in helping our clients increase their employee retention rate while helping injured workers in their overall recovery.  Considering the direct and indirect costs associated with losing a valued employee, ReEmployAbility can assist in enabling all companies to retain employees and save on high costs.

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5 Putting the Service-Profit Chain to Work: by James L. Heskett, Thomas O. Jones, Gary W. Loveman, W. Earl Sasser, Jr., and Leonard A. Schlesinger.