How custom software can help prevent high turnover rates

Posted by Justin Hesser on November 19, 2012

It can be hard to measure just how much of an effect one employee has on the company they work for. But, according to the Center for American Progress, it may be necessary for companies to start using technology in order to gain an estimate, as the costs of employee turnover can be crippling.

According to the source, an average company will spend about one-fifth of a worker's salary just replacing that employee, should they leave. For businesses that typically function with a high turnover rate, this can quickly increase expenses and hurt the bottom-line – not only in rising costs, but also in overall productivity. The more workers that come in and out of the office doors the less work is ultimately accomplished.

More specifically, the source's research found that positions which do not require a very specific skill set will create, on average, a turnover cost of 21 percent of an employee's annual salary. In addition, the cost of turnover between workers that are paid $50,000 annually and those that are paid $75,000 is less than one percent.

With turnover rates proving to be so costly for businesses, it may benefit managers to invest in software that allows them to quantify approximately how much of a return on investment the company gains from each employee. By consulting a FileMaker developer, businesses can create custom database software that can aid in this process.

Furthermore, by using this technology to store important employee data, managers can calculate how effective a worker has been and how much it would cost to replace this individual, should he or she leave or need to be terminated. This information can encourage supervisors to implement benefits that help retain employees longer, or improve their ability to make more informed hiring decisions.