The $1 Trillion turnover cost, and the solution

A recent report published by Gallup showed the serious problem of voluntary employee turnover. According to the study, In 2022, the overall cost of voluntary employee turnover amounted to over $1 Trillion. Yes, that’s right it’s $1 Trillion.

You might be stuck with a daily work routine and didn't have time to re-evaluate your hiring strategy, which is the beating heart of your business. So we did it on your behalf:

EMPLOYEE TURNOVER STATISTICS BY INDUSTRY

The high turnover rate is a huge cost for your business and many companies underestimate it. It makes your business unstable, makes you deal with uncertainty, and holds you back from growth. A 100%+ turnover rate means you are technically changing your whole team every year, and dealing with costs associated with recruiting, training, permits, and benefits.

Many of the job functions in industries mentioned above like cashiers, waiters, receptionists, and more are becoming less appealing to talents and are perceived as temporary jobs.

Despite the increasing demand for highly skilled gig workers—Most companies fail to realize the full potential of this new working arrangement. Adapting a flexible on-demand staffing strategy is a good way to reduce your hiring cost and avoid dealing with a high turnover rate. The sooner you adapt to a flexible on-demand hiring strategy, the faster you can accumulate savings and minimize losses. You might ask, what would be the potential savings you can accumulate?

Salary & Benefits Saving:

When you hire flexible on-demand staff, you are not required to pay other benefits like Social Security, reimbursement for transportation, housing, and other benefits. So we deducted the company's Social Security payment percentage of 11%.

Health Insurance Saving:

You are legally required to provide Health Insurance to your full-time employees and their spouses and children. However, you are not required legally to provide health benefits which is a good potential saving. In our calculation, we multiplied the number of employees and number of new employees a year by the yearly health care plan cost per year.

Vacation Saving:

Vacations are more costly than most businesses realize. Having flexible on-demand employees won't require you to offer any vacations to flexible hourly workers. We calculated a daily rate for your full-time employees and multiplied it by the number of vacation days and the number of employees. This is a high cost most businesses underestimate.

Admin & Turnover Saving:

When you are running a business with a 50%+ turnover rate, your company is in endless recruiting, training, and hiring. Doing all this manually requires a full-time dedicated recruiter. Using Workhint, the process of finding, hiring, and paying will all be automated. This automation will not require you to have a full-time dedicated HR person because Workhint will bring Autonomy to these processes. Plus, having a network of trained and vetted talents in your network will cut your training and onboarding expenses.

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The good news, we have a calculator you can use to estimate the potential saving that could be accumulated in your business by adapting the on-demand staffing strategy to your high turnover functions. You can see below an example of potential savings for a company with 50 employees and dealing with a 60% turnover rate.

The strategy based on the numbers presented above looks so appealing, but how appealing is it to talents?

Work Flexibility is one the most appealing incentive many people seeks especially after Covid. According to Pew research center, 49% of gig workers said the ability to set their own hours is the most important factor when working in the gig economy. 48% of new freelancers said they view freelancing as a long-term career choice. 70% of freelancers claim that they choose to work in a gig economy for an improved work-life balance.

The gig on-demand staffing model is getting more attractive with time as more resources are offered to talents. For examples, many companies now tailoring services for gig workers like Banking for gig workers that offer loans, and accounts without requiring monthly deposits. And Healthcare plans tailored for gig workers. In addition, the ability to add a 401K or retirement plan.

In conclusion, the on-demand gig work hiring model is the future of work and the early adapters will accumulate a high competitive advantage. To get started, press here to request a demo