When an employee leaves your company, you stand to lose a lot. First, employee turnover is expensive. Really expensive. In fact, turnover can cost as much as 213% of an individual’s original salary. Yikes! On top of that, employee turnover also costs your company time. SHRM’s most recent report puts the average time to fill an open role at 36 days. But, as many HR professionals know, it can take even longer. And it doesn’t stop there. It can take an employee significant time to get informed and into a rhythm with their new role, meaning an even greater productivity loss until they’ve reached an optimal performance level. The third, more insidious cost of losing an employee? When they leave, all their knowledge will walk out the door with them unless businesses have a knowledge transfer plan in place.
Employee turnover is always a top concern for organizations, and now even more so with the turbulent environment created by Covid-19. In June, total job separations increased 11% in the US, while hires hovered near their series high at 6.7M, according to the most recent summary from the Bureau of Labor Statistics. With unemployment soaring and remote work making the job pool even larger — and the temptation to switch jobs even greater — it’s likely that the risk of employee turnover will only continue to grow, and organizations need to be prepared for it.
So, how can organizations avoid the high cost of talent turnover? The answer is having great resources in place to manage company-wide knowledge and information. Successful knowledge management defeats talent turnover in two ways: first, it helps businesses retain staff for longer and get up-to-speed faster, reducing turnover, and second, it ensures there isn’t significant information loss when people do eventually leave. Let’s dive into each.
Successful knowledge management and access creates a more effective and rewarding onboarding experience. When equipped with the right information, new hires can immerse themselves quickly, better understand expectations, and start making an impact from day one. These tools also encourage more knowledge sharing within the company network. Instead of sorting through thousands of old emails to find a file, hunting down a colleague to get an answer to their question, or worse, not getting what they need at all, workers can turn to a centralized platform and get the information and resources they’re seeking right when they need them.
In fact, an increase in knowledge sharing significantly and positively affects employee engagement, according to a study by the University of Malaysia. Why? It allows employees to fully immerse themselves in their work, empowering greater productivity and flow without hang-ups or obstacles. Workplace engagement is key to defeating turnover — companies with highly engaged employees see 67% less turnover than their competitors. To put all this more plainly, effective knowledge management makes people better, happier employees, and better, happier employees are less likely to leave.
But, even the best, happiest employee may seek out new opportunities eventually. Having knowledge management tools in place means you can retain information in real-time and make it collectively available, so if an employee leaves, they don’t take valuable insights with them. Think of it like passing the torch and if you don’t do it well, you could set the whole house on fire. That fire is expensive, too: Fortune 500 companies lose $31.5B (that’s billion, with a b) a year by failing to effectively transfer knowledge. But, by encouraging greater knowledge sharing (learn all about how to do so effectively in our recent blog), companies can effectively gather explicit, implicit, and tacit information from employees during their tenure, preventing any knowledge loss from eventual turnover and keeping operations running smoothly in the meantime.
Even before Covid-19, worker tenures were getting shorter, increasing the risks and costs associated with talent turnover. But, with so much turbulence in the job market thanks to Covid-19, it’s never been more imperative for organizations to invest in a knowledge management system that saves time, money, and knowledge. The best part? They don’t have to cost you lots of money.
At CatalystXL, we understand that effective knowledge management will not only help you retain top talent, but increase your overall business productivity, too. We built our mobile platform to make valuable information instantly available to everyone on your team, so employees can onboard, work, and offboard effectively and your business can thrive. Interested? Book a demo today.