Employee turnover is a significant concern for businesses, with recruitment and training costs soaring in today’s market. High staff turnover can disrupt work, lead to understaffing, and negatively affect employee morale and overall well-being. As businesses grapple with these challenges, it’s essential to explore innovative solutions that not only reduce staff turnover but also cut recruitment and training costs. 

The Vicious Cycle of High Employee Turnover

High staff turnover can trigger a cascade of problems within an organisation. It often leads to understaffing, overworked employees, and unmet targets. This results in unhappy and burnt-out staff, fosters toxic cultures, and offers fewer growth opportunities as employees just try to fill the gaps. In the long run, these issues perpetuate the high turnover rates as employees look for better opportunities that are more stable, manageable and promote work-life balance, not detract from it. To break this cycle, employers must focus on employee health and happiness through health and well-being benefits, among other perks.

The Financial Cost of Employment

The cost of hiring and retaining employees has significantly increased in recent years. The average cost of hiring now stands at $23,800 across Australia and New Zealand, with some companies spending as much as $40,000 per candidate. This is as there are many direct indirect expenses that can be incurred during the hiring process, including:

• Ad placements
• Recruiting agencies
• Temporary and contingent workers’ management
• HR and manager salary allotment for screening and interviews
• Travel and moving expenses
• Signing bonuses
• Cost of onboarding, including training, equipment, and technical setup
• Productivity loss
• Decline in staff morale
• Loss of intellectual property

These direct and indirect costs significantly impact an organisation’s bottom line and can accumulate into substantial financial losses. In fact, replacing an employee can cost anywhere from 30% to 200% of their salary, according to recruiting experts.

The Rising Costs Of Staff Turnover

Employers now consider both direct and indirect costs associated with staff turnover, which significantly inflate the overall price tag. These indirect costs, such as lost intellectual property, cultural disruption, productivity loss, and reputation damage, often overshadow the direct recruitment expenses.

Several factors have contributed to the escalating costs of hiring and retaining employees. Longer acquisition times, driven by a scarcity of talent, have compelled recruiters to increase salaries and invest more in retention efforts. The prevailing skill shortage has also created a competitive hiring landscape where employers vie for a shrinking pool of candidates.

The Biggest Cost of Recruitment: Bad Hires

Amid the challenges of high staff turnover, the most significant cost of recruitment is making a bad hire. Hiring an unsuitable or toxic individual can cost businesses up to 2.5 times their full-time salary. The ramifications of a poor hire encompass damage to office culture, legal fees, colleague burnout from picking up the slack, additional salary payments, and rehiring expenses.

HealthNow: A Sought-After Solution

Utilising HealthNow as a health benefit for your employees can help reduce staff turnover and recruitment costs in many ways, including by prioritising the health and happiness of employees. When companies offer HealthNow as a benefit, it signals their commitment to supporting their employees’ health and well-being. Employees appreciate having the freedom to use their allocated funds for various health services, from medical check-ups to physiotherapy. This proactive approach to healthcare can help prevent health issues from escalating, keeping employees healthier and more engaged at work.

HealthNow can also help to significantly reduce recruitment costs by improving employee retention. When companies provide HealthNow as part of their benefits package, they can become more attractive employers to many. Employees value the opportunity to manage their healthcare proactively, and to be given the funds to do so. As a result, they can consider this when deciding whether to retain their current roles, helping to reduce the need for frequent and expensive recruitment efforts. By supporting employees’ health and well-being through HealthNow, companies can establish themselves as employers of choice, creating a workplace culture that values the holistic welfare of their staff.

HealthNow For Companies

HealthNow offers an all-in-one solution for both emergency specialist care and day-to-day health and wellness costs. The flexibility it provides, coupled with the absence of stand-down periods and pre-existing condition exclusions, distinguishes it as a highly sought-after health benefit, supporting employers alongside employees. Employers can set parameters for approved service sectors, allowing their employees access to a wide range of healthcare providers across Australia and New Zealand. With control over their healthcare choices, employees can focus on preventive care, reducing the risk of absenteeism and presenteeism, too.

Companies that have embraced HealthNow report an increase in healthcare accessibility and utilisation among their employees. This results in a faster return to work following illness or injury. Employees are taking proactive steps to manage their health, contributing to a healthier and more engaged workforce.

Getting Started With HealthNow

Getting started with HealthNow so you can start reaping the benefits for your organisation and your employees is made incredibly simple and easy – just input your information here, whether you’re keen to learn more or get started. We can set you up with a demo, answer any questions, and help tailor a solution that’s best for you.

You can also read more about the power and importance of offering the right employee benefits in today’s job market, alongside what is happening in current recruitment efforts, in our comprehensive 2023 Employer Market Report here.