Employee turnover can be painful. You not only lose key personnel, but you also have the added expense and hassle of having to hire and train new employees.
However, the perception of high turnover is often not the same as reality – and it certainly is not a reason to invest less in employee healthcare engagement.
Employee Turnover by the Numbers
The Society for Human Resource Management (SHRM) has useful benchmarking statistics on employee turnover:
- Median Annual Employee Turnover is 14 percent
The median can be interpreted as the middle, i.e. half of the responding firms had greater than 14 percent turnover and the other half of responding firms had less than 14 percent turnover.
- Median Average Employee Tenure is 8 years
This statistic is a little more confusing. It can be interpreted as half of the responding firms had an average tenure of more than 8 years and the other half of responding firms had an average tenure of fewer than 8 years.
- Median Voluntary Turnover (i.e. employee choosing to leave) is 3x higher than median Involuntary turnover (i.e. employee being asked to leave/fired by management).
Implications for Employee Health Plans
- Overall turnover is relatively low and does not vary that much.
Eighty-six percent of employees stay one year to the next. For half of the surveyed firms, it’s as high as 94 percent staying and as low as 76 percent.The employee health plan implication is that it is worth the time and expense for employers to try and modify employee behavior. The argument that employers shouldn’t try to modify employee behavior because employees “just leave anyway” is just not valid.
- At 75 percent of firms, employees stay for at least five years. Five years seems to be a reasonable amount of time to impact employee behavior.
Let’s view employee engagement regarding their health and their use of healthcare services strictly as a training issue. If a firm has a job that is physically demanding (e.g. construction, airline baggage handler) and the employees typically were at that job for at least 5 years, that firm would ABSOLUTELY invest in safety training for the health of the employee and to reduce the risk of future workers’ compensation claims.Employee health plan training is also likely worth the time and expense for most firms.
- By far, employees quit/retire vs. are fired/laid-off… by a ratio of 3:1.
Let’s imagine the opposite scenario: If a firm fired 3x more employees than left on their own, it might be reasonable not to invest in educating them how to use healthcare services. That would be like the TV show “American Idol” investing in singing lessons for all the people that audition—which of course, they do not do.
However, once an employee is ‘on the team,’ the vast majority are wanted by their firm. Sure, the management can gripe about employee performance, but it is better to examine their actions rather than their words… they typically do not fire the employees.
Therefore, if a firm ‘wants’ to keep its employees, but does not train them on their health and their use of healthcare services, it’s almost akin to neglect. Or at least, it is a poor form of risk management.
Takeaways for Employee Benefits Professionals
Turn-over often feels high because it is often painful for the firm because of the quick need to fill a position, the hiring of replacements and the training required. However, that feeling does not reflect the reality that most employees stay and they stay for a long time.
I encourage you not to overestimate the amount of turnover. Don’t let your perception prevent the investment of time and money in educating employees about their health and use of healthcare services.
To learn more about how employers use Compass as a means for training employees on the use of healthcare services, visit www.compassphs.com.