When an employee leaves a company it can end up costing a business dearly, and often results in a shrinking profit margin and cashflow shortages.
Employee turnover can have a significant impact on a small businesses accounts, but while it’s impossible to prevent an employee from ever leaving your business, there are some things you can do to minimize the risk of it happening and prevent it from becoming an expense your company could do without.
Firstly, let’s look at where employee turnover costs come from:
- Fess to recruiters for sourcing replacement employees
- Costs associated with hiring
- Labor costs of existing employees working harder as a result of staff shortages, which could include over time
- PTO payouts as a result of time off accrued
Then, once a replacement candidate is found and hired, an additional set of costs are likely to be incurred, which may include:
- Training new intake
- Loss of productivity during training periods
- Upholding good relationships with clients to avoid losses resulting from turnover
What can you do to prevent employee turnover?
Keeping employees engaged and wanting to continue working for you isn’t always a cakewalk, but by communicating in a positive manner with them, awarding them a fair salary and a robust support system, you can help give them more good reasons to stay in your employ than to leave it.
For calculating the turnover rate of employees within your company, the following formula can be used:
Turnover rate (%) = (employees who left the company/total number of employees) *100
Naturally, having a percentage as close to zero as possible, is the target for your company, but what if you could at least eliminate the worry and expense of a member of your accounting team leaving?
Outsource to reduce the burden of employee turnover
Outsourcing your accounting requirements to a remote third party eliminates most of the costs associated with hiring an in-house accountant, or team of them. So, you could have an experienced team of accountants helping you manage your taxes and the like, at a fraction of the cost of an in-house employee.
Not only that, but because you’re working with a team of accounting professionals, if one of them should happen to leave the provider they work for, it wouldn’t affect you in the slightest as another accountant would simply step in and continue working on your accounts.
Outsourcing, whether it be Human Resources, accounting, bookkeeping or any other functional aspect of your business, is a great way not just to reduce the costs associated with hiring an in-house workforce, but also the expense and inconvenience typically caused when an employee leaves. To discover what outsourced accounting could do for you and employee turnover, schedule a free consultation with a reputable third party provider, today.