THE REAL COST OF HIGH EMPLOYEE TURNOVER

When it comes to high employee turnover, many managers assume that's just how it is in their industry, or accept that it is part of the cost of doing business. But what’s the actual cost of employee turnover?

It’s much higher than you realize.

Turnover Costs Add Up Quickly

It’s fairly straightforward to tally up the tangible costs of replacing an employee: posting ads to job boards, a recruiter’s time for reviewing resumes, time used for interviewing and the new employee’s training period.

But the intangible costs add up just as quickly and can actually be more impactful for a company:

• Short-term lost productivity is lost from 2 employees because the new, inexperienced hire has lower productivity and the employee performing new-hire training is slowed as well.
• Long-term productivity is lost from 1 employee because it may take a new hire 1-2 years to reach the productivity of the experienced employee you lost.
• New hires can make costly errors that impact your customers and that take up time for otherwise productive employees to correct.
• Employee turnover also adds costs due to safety risks, as new hires may not be familiar with the work environment and required safety precautions.

What’s the Average Cost of Employee Turnover?

Turnover and replacement costs for semi-skilled workers, such as truck or forklift drivers, can be as high as 30%-50% of their annual salary. Costs to replace general warehouse workers can be an additional 16% on top of their annual salary.

Unfortunately, many managers see this data but don’t know how to address the issue. Though there are many reasons for higher turnover, especially in hourly-wage jobs, one of the biggest complaints cited for leaving a job is employee satisfaction.

When employees don’t feel safe, comfortable, and appreciated, they become disengaged from the job. Their performance and productivity wane, and sooner or later, they leave the job.

How Increasing Employee Satisfaction with PPE Can Reduce Turnover in Refrigerated Environments

Recruiting employees to brave the constant, brutal cold of refrigerated warehouses, blast freezers or climate-controlled food processing facilities is already difficult. But neglecting factors that impact employee job satisfaction, such as adequate personal protective equipment (PPE), can make a tough job even harder.

Cheap Gear Underperforms, Restricts Productivity and Requires More Frequent Replacement

Choosing cheaper protective gear that doesn’t last or adequately protect employees will cost you more in employee replacement costs and lost productivity. Spending $50 more each for 10 $13-per-hour employees, for example, may be more in upfront costs, but losing just a couple of those employees due to inadequate equipment would cost you twice as much to replace.

Inadequate Protection Leads to Dissatisfaction

Workers in refrigerated environments have unique challenges, including uncomfortable temperatures and mandated recovery time outside of the cold. Inadequate apparel that wears out quickly or allows for cold spots will lead employees to discomfort and impact their ability to perform well, leading to frustrations with the job. Whether it’s choosing the right jacket and gloves, or the all-important comfortable footwear, correctly outfitting your warehouse team in cold environments may be one of the biggest factors in creating satisfied employees.

Poorly Made Gear Hurts Production

You want to keep great employees who value performing well. Losing a high-caliber employee due to bad gear is a tremendous cost. One of your greatest risks may come from giving them the wrong tools and gear to do their job. After all, a great employee who strives to perform well but is limited by sub-par equipment will eventually become frustrated and leave. Things to consider in purchasing the right protective gear for the cold are whether it provides the right amount of protection while also providing a full range of motion, if it reduces recovery time, and if it provides extra functionality (like extra pockets on jackets or grips on gloves).

Safety Enhances Satisfaction

Obviously, recordable safety incidents will cost companies money. However, employee satisfaction is also impacted by safety in the workplace. This is especially true in cold environments, where health safety is as much a concern as forklift or machine safety. Keeping employees protected from the cold, whether in the warehouse, on the loading dock or driving a truck, will enhance safety and employee satisfaction.

Who Pays for Gear Affects Employee Productivity

Requiring protective gear but making the employee pay for it is a sure way to drive down employee satisfaction and loyalty. Employees are more likely to buy cheaper or inadequate gear for extreme cold, which leads to the issues impacting employee satisfaction mentioned above.

The Bottom Line: PPE and Employee Turnover

When managers are deciding on PPE for refrigerated or climate-controlled warehouse, they only consider the cost of the PPE instead of looking at the bigger picture of how PPE impacts employee productivity and satisfaction. These managers should be thinking, “How does my choice of protective gear impact productivity, employee satisfaction, safety and costs now and in the future?"

Employee turnover can’t be eliminated completely, but it can be reduced by considering employee satisfaction and how small changes in your approach PPE can result in a large reduction of costs by reducing turnover.

Shopping for a Team?

If you need help selecting PPE or insulated workwear for your employees, please contact RefrigiWear Customer Service.