Small Business

This Simple Hack Could Reduce Employee Turnover

According to the Center for American Progress, job turnover on average costs a business roughly 20% of the departing employee’s wages/salary.  The cost incurred also depends on the level of the position, as executive level turnover can in some cases cost as high as 213% of total remuneration: it could cost upwards of $320,000 per year to replace a senior executive earning $150,000 annually.  Increased recruitment expenses, loss of productivity, and training expenses are just a few factors that contribute to this expense.  

Employee Retention Strategies

Companies are beginning to recognize the negative impacts of high turnover and are implementing retention strategies to combat this problem through a combination of corporate culture, team building activities, and employee engagement practices. However, the solution to turnover is quite simple and does not require the services of a consultant.


According to the Society for Human Resource Management, 67% of employees said respectful treatment is very important, making it the top contributor to overall employee job satisfaction.

The research examined 43 distinct aspects of job satisfaction and 37 direct factors relating to overall employee engagement. Compensation, Job Benefits, and Job Security ranked in the 2nd, 3rd and 4th place, respectively, behind ‘respect for employees’.

Surprisingly, factors that are generally believed  to directly relate to overall job satisfaction polled considerably low. The Work Itself ranked in 9th place while ‘Corporate Culture finished in 13th place. Some notable highlights were the rankings of Teamwork Between Departments, Variety of Work,  and a Diverse Work Environment  which ranked 17th, 19th, and 22nd, respectively.

Appreciation is Key

A recent survey by OfficeTeam revealed that more than two thirds (66%) of employees said they would likely leave their job if they did not feel appreciated. The lack of training, employee benefits, praise for a job well done, being passed up for promotions, and failing to understand employee needs contribute to employees feeling under appreciated.

Often times a sense of appreciation can be garnered by simply telling an employee they are in fact appreciated. It doesn’t cost a company to say thank you however the cost of not saying anything could be burdensome.

Happiness and Productivity

An economist at the University of Warwick, who spearheaded a recent study about the correlation of mood and productivity, concluded that happiness led to a 12% spike in productivity while unhappy workers proved 10% less productive. This equates to a 22% swing in productivity from happy employees to unhappy employees.

Relating this directly back to the Society for Human Resource Management’s survey, lack of respect for employees could mean a 22% reduction in productivity. A 2013 Gallup survey reported that unhappy workers cost US businesses between $450 and $550 billion.


Employee engagement and happiness comes down to psychology. The relationship between an employer and an employee is exactly that, a relationship. When one party in a relationship feels under-appreciated often times that party ends the relationship.

Reasons couples break-up  can serve as an indicator for poor relationships: lack of communication, unfair treatment, frequent arguments, and lack of appreciation are a few. This research justifies  that relationships, whether it be between couples or employees and employers,  last longer and are more mutually beneficial when both parties are happy.


If this article did not convey the importance of maintaining healthy relationships with employees, then image you treat your best customer the same way you treat your employees. Would you still be in business? If the answer is no then odds are you are not tackling the root issue of employee turnover.

By no means am I saying to ignore employee’s faults and not point out areas where they can improve. Even a poor performing employee should be treated with respect. If you are serious about creating an environment in which employees feel respected and appreciated you must be quick to praise and apprehensive to scold your employees.




Jeremias Ramos is a CPA working at a nationally recognized full-service accounting, tax, and consulting firm with offices conveniently located throughout the Northeast. Jeremias specializes in tax and business consulting with focus areas in real estate, professional service providers, medical practitioners, and eCommerce businesses.

2 comments on “This Simple Hack Could Reduce Employee Turnover

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