Turnover: Its Hidden Cost and How a LMS Can Help Remedy It

March, 09 2023

The cost of an employee leaving can be more than 2x their salary, while unavoidable, a tools like a LMS can help remedy it

Over the past couple of years, the business world has been inundated with worker upheavals, from “the great resignation” to the more recent “quiet quitting.” While most conversations focus on the question of “why workers are doing this,” there has been little on the massive impacts on the company they’re leaving or on how to prevent it.


Turnover, or the time it takes to replace a leaving employee, is the biggest impact of employees leaving despite no longer paying them. It may sound unbelievable, but turnover can easily be up to 2x more than the leaving employee’s pay. Investing in tools like a learning management system (LMS) may help lower the cost of turnover in some unexpected ways.


The Hidden Costs of Turnover

That “2x greater figure” seems impossible, yet there are so many invisible costs to turnover that even extend beyond purely monetary values. One caveat is how much the leaving employee does for the company, certainly a C-level employee leaving will be much more impactful than the lowest level, however, both carry costs.


Productivity Costs

The most apparent and damaging lost comes in the form of productivity. It is easy to underestimate how much an employee actually does, but whenever they leave, employees in different positions will have to take on more (sometimes completely different) responsibilities. Even if the person leaving didn’t do as others, the void they leave will send ripples as their peers have to drain their effort into the hole.


Job Advertisements

Seeking to fill the vacant position will undoubtedly cost time, money, and productivity. Whether it be through paid job ads or the time hiring managers must put into sorting, reviewing, and interviewing potential employees, resources will be spent.


Hostile Workplace

With the diversion of productivity will come additional stress and other employees’ obligations are often delayed. The stress of missing deadlines or unperforming because your attention is split is only exaggerated if the people above you still hold you to account. All this festers and can manifest as employees lashing out or quitting themselves.


Training and Getting Settled

Whenever the open position is filled, it will still take time for the new employee to acclimate to the position. This progression, whether it requires the new employee to be trained or not, will mean reduced productivity despite the new salary.


Those are just a few examples of the ripple effects that an employee leaving can set in motion across the organization, amounting to the upper estimation of two times the cost of that employee’s salary.


Reducing Turnover Costs with a LMS

Turnover costs are inevitable, however, if the proper tools and protocols are in place, then the cost can be reliably reduced. Focusing on how a LMS can impact turnover will give examples of noticeable costs like training while illuminating deeper causes like company culture.


What Leads to Turnover?

Quitting, obviously, but stopping there only ensures that none of the root problems causing this turnover cost will be addressed. People quit for many different personal reasons, however, there are broader trends of what compels quitting.


Lack of Growth

This is by far one of the biggest reasons cited for people quitting and for good reason, devoting multiple years of your work to a company only to feel as if you haven’t progressed at all is upsetting while being a poor financial move to stay. A LMS can help remedy this by giving your employees access to a database full of different skills and abilities that’ll allow them to help on ambitious projects or move out of their comfort zone.


Lack of Recognition

An employee developing their skills and contributing to ambitious projects will only so far if they are not properly recognized. In this way lack of growth and lack of recognition are linked together, as employees desire both a growth in talent along with recognition of that growth. Recognition, however, requires attentive managers which can be encouraged by delivering training content that sets expectations for managers. CoreAchieve, for example, has many different courses on proper management practices that will reduce turnover from poor management.


Company Culture

Of course, one of the biggest reasons for people to leave a company is a toxic culture. Company culture can manifest in a large variety of ways, including the two reasons listed above, but it can cause physical harm to people like by ignoring safety regulations or cutting corners. Unfortunately, addressing company culture is one of the longest and overlooked endeavors. Using a LMS can help address a toxic company culture by defining expectations for new employees, but more will have to be done to address people in power who promote it.


A LMS Can Help Recover from Turnover

Implementing a learning management system can help reduce the reasons for people leaving while also making your process of training new employees more efficient. By allowing employees to train on their own time, with their own devices, and allowing employees to connect with each other, a LMS, when properly implemented, can reduce the amount of lacking productivity while a person becomes acclimated with the company.  


Can’t Stop Turnover, So Reduce It

Turnover is inevitable with any organization, so the best thing would be to minimize it’s 2x cost by implement systems and methods like a LMS. While it cannot solve every problem, on one hand, a LMS can help address toxic parts of a company that might make people leave, and on the other, make the new employee onboarding much more efficient.


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