Life Sciences: How Much Does Employee Turnover Really Cost?

04.08.19

According to a 2018 study by Radford Aon, life sciences companies see an average voluntary turnover rate of 11.5% in the United States. While this number might not ring any alarm bells, the effect it has on a company’s bottom line surely will.  For instance, the process of recruiting a new employee in the life sciences industry can end up costing employers six to nine months’ salary of the open position.  With the average salary for a life sciences employee sitting at $64,510, the cost to replace only a handful of employees can surpass a few hundred thousand dollars annually. In addition, double digit voluntary turnover is hard to replace quickly with a national unemployment rate of 3%.  Furthermore “voluntary” turnover assumes that those who left the company were employees the company wanted to keep.

 

Aside from recruiting costs, companies face a significant loss of productivity after an employee leaves. The real cost of employee turnover lies somewhere in between the quantitative and qualitative metrics. Potential customer dissatisfaction, reduced or lost business, stress on remaining employees to pick up the slack, and lost expertise often go overlooked when evaluating the cost of a turnover. One thing is for sure: turnover is expensive! Fortunately, there are ways to mitigate employee turnover and the negative impact it can have on your business.

 

Positive employee engagement can help to limit turnover. Generally, the more engaged an employee population is, the lower the turnover rate is likely to be. Unfortunately, the life sciences industry has seen decreasing employee engagement rates over the past few years. “Workers (in the life sciences industry) are frustrated by a lack of opportunity to progress their careers and an increasing number of them may be looking to move on” asserts a recent ProClinical employee engagement report. In fact, only 50% of U.S. employees surveyed said they are committed to staying at their current company for 12 months or more.

 

Not all is lost, though.

 

Employers can boost employee engagement and satisfaction on day one by hiring the right people for the right positions. Putting people in a position to thrive is the first step of developing a highly skilled, engaged employee. Next, explore ways to give control and ownership to your employees wherever you can. This is where technology and fully defined career paths come into play.

 

Discover the advantages of implementing self-service programs that allow employees to take care of tasks that previously required a chat or approval from a supervisor, such as requesting time off or switching shifts with another employee. Employees will also appreciate being able to check their paid-time-off balance at the touch of a button. Additionally, think about offering a robust employee intranet that contains company policies and procedures, FAQs, and a variety of online training programs – both required and elective.

 

Another way to increase employee engagement is to forge clear paths for professional development. In the United States, life sciences employees most desire career support and growth opportunities. Developing your current employees not only provides the opportunity to hire from within and fill position gaps, but also keeps your employees challenged and motivated to progress to the next step in their career. Skills development is proven to increase retention and improve the quality of leadership long term. Never underestimate the importance of your “bench strength” as it relates to succession planning and the future leaders of your business. Additionally, don’t feel pressured to promote too early – job rotations or even “shadowing” other positions are great interim steps.

 

Finally, improving and increasing communication is an effective way to boost employee engagement each and every day. Take the time to express the daily, quarterly, and annual goals for your organization and how each employee plays a role in the achievement of those goals. Reminding employees how their individual contributions affect the overall success of the organization can foster a sense of pride in the work they do and increase their level of engagement.

 

When it comes to your communication efforts, it’s important to remember that just as each employee is unique, so are the ways that they digest information. Communicating through one medium or on one schedule will not be effective for your entire population. Commit to providing the same message in a variety of ways so as to better reach each individual in your workforce and reinforce the message. Additionally, make sure employees have more than one channel to express their opinions and concerns. Foster a two-way conversational environment to increase engagement.

 

The bottom line is that improving employee engagement may be a solution to the turnover epidemic, but it isn’t something that happens overnight. It’s an investment in every individual in your workforce and an ongoing commitment to the development of your people and your practices. With a well thought out plan focused on engagement with retention metrics, you can create a workplace culture that employees actually want to remain a part of.

 

Be an employer of choice, not the employer employees choose to leave.

 

Baker Tilly Vantagen offers a full suite of HR consulting services. Let us help you bolster your employee engagement and improve your retention rates. Connect with us today to learn more.