--- title: 5 Reasons High Turnover is Hurting Your Business description: High employee turnover can have damaging effects on your business. Beyond costs, it can affect employee morale, productivity and their quality of service. image: https://blog.premployerinc.com/hubfs/5%20reasons%20high%20turnover%20is%20hurting%20your%20business.jpg --- Recruitment and Hiring # 5 Reasons High Turnover is Hurting Your Business High employee turnover can have damaging effects on your business. Beyond costs, it can affect employee morale, productivity and their quality of service. [ PRemployer ](https://blog.premployerinc.com/prblog/author/premployer) Jan 8, 2019 [mailto:?subject=Check%20out%20https://blog.premployerinc.com/prblog/5-reasons-high-turnover-is-hurting-your-business&utm_medium=social&utm_source=email%20&body=Check%20out%20https://blog.premployerinc.com/prblog/5-reasons-high-turnover-is-hurting-your-business&utm_medium=social&utm_source=email](mailto:?subject=Check%20out%20https://blog.premployerinc.com/prblog/5-reasons-high-turnover-is-hurting-your-business&utm_medium=social&utm_source=email%20&body=Check%20out%20https://blog.premployerinc.com/prblog/5-reasons-high-turnover-is-hurting-your-business&utm_medium=social&utm_source=email) [Recruitment and Hiring](https://blog.premployerinc.com/prblog/tag/recruitment-and-hiring) ![5 reasons high turnover is hurting your business](https://blog.premployerinc.com/hubfs/5%20reasons%20high%20turnover%20is%20hurting%20your%20business.jpg) ![5 reasons high turnover is hurting your business](https://blog.premployerinc.com/hs-fs/hubfs/5%20reasons%20high%20turnover%20is%20hurting%20your%20business.jpg?width=600&name=5%20reasons%20high%20turnover%20is%20hurting%20your%20business.jpg) Employee turnover has always been a major concern for businesses, and that’s especially true as the pandemic winds down. Summer 2021 saw a [surge of resignations](https://www.forbes.com/sites/karadennison/2021/04/27/why-the-2021-turnover-tsunami-is-happening-and-what-business-leaders-can-do-to-prepare/?sh=644aac4e6d08) as employees switched jobs in droves once they perceived it as safe again. In 2021, U.S. companies had an average [57.3% turnover rate](https://whattobecome.com/blog/employee-retention-statistics/). Fortunately for business leaders, 50% of employees intend to stay permanently at their next job.  People leave jobs for a number of reasons, such as retirement or relocation. It may also be directly related to your business. Your company culture or relationships with co-workers go a long way to [retaining talent](https://blog.premployerinc.com/prblog/4-ways-your-approach-to-the-pandemic-retains-talent). Regardless of the reason, losing talented employees can have a negative impact on your business in a number of ways. ## 1. High Cost of Turnover Organizations are losing their top performers and it's having a serious impact on their bottom line. Employee turnover currently costs companies in the U.S. [over $630 billion as of 2020](https://info.workinstitute.com/hubfs/2020%20Retention%20Report/Work%20Institutes%202020%20Retention%20Report.pdf), and replacing employees costs organizations [33% of an employee’s annual salary](https://emplify.com/blog/state-of-employee-turnover/). That is a huge cost to employers and taking measures to improve employee satisfaction helps to reduce its cost to you.  ## 2. Decreased Productivity Beyond the additional costs of replacing an employee, turnover can also cause productivity loss among your staff. A top performer can deliver [over 400% greater productivity](https://www.forbes.com/sites/forbescoachescouncil/2020/03/20/keeping-top-performers-requires-extra-effort-in-todays-market/?sh=6df79cb3367e) than an average performer. Losing even one-star employee can make it difficult to maintain the same level of output, affecting your revenue and profitability. Furthermore, remaining employees may be responsible for filling in the gap, which may affect their productivity.  ## 3. Lower Product or Service Quality Constantly replacing employees not only leads to lower productivity, but it can also lead to poor quality of work. This is usually due to lack of training or a heavy workload brought on by those who left. Providing sub-par products and services can cause you to lose customers and customer referrals, impacting your business and bottom line.  ## 4. Low Morale High turnover can cause employees to question your business practices - regardless of the reasons behind it - leading to low morale. This is a common byproduct of turnover, as employees may feel insecure about their own jobs or become overworked from taking on additional duties. The effects of low morale include reduced productivity, less motivation, dissatisfaction and even more turnover.   ## 5. Time Commitment The [time to fill an open position](https://www.hirevue.com/blog/seven-recruitment-metrics-that-matter) depends on a number of factors such as the industry, the level in the organization and the specialization of the position. Talent acquisition teams are really feeling the [strain of high turnover](https://businesspartnermagazine.com/turnover-turbulence-understanding-impact-high-employee-turnover/). Worse, turnover tends to take time away from focusing on critical business initiatives and driving strategy forward. The lack of continuity in key positions, for example, can easily set a project back by several months.  ## Partner with a PEO to Reduce Turnover  High employee turnover can have damaging effects on your business. Beyond costs, it can affect employee morale, productivity and their quality of service. Protect your business from these negative effects by [partnering with a PEO](https://blog.premployerinc.com/prblog/how-to-choose-the-right-peo-for-your-business), which bring the benefits of [lower turnover rates](https://www.napeo.org/docs/default-source/white-papers/2021-white-paper-final.pdf?sfvrsn=6dde35d4_4) and a higher likelihood of long-term success.   With a team of professionals available to support your human resources needs, you'll have access to a broad array of services that may otherwise be outside your grasp. With a well-managed HR department, your business is much more likely to thrive and remain competitive in the marketplace - giving your employees more incentive to stick around for the long haul.  [![New call-to-action](https://no-cache.hubspot.com/cta/default/4685699/f70dff76-fe50-4f23-969f-e51c4fb74d63.png)](https://cta-redirect.hubspot.com/cta/redirect/4685699/f70dff76-fe50-4f23-969f-e51c4fb74d63) ## Similar posts HR Management & Compliance ### [Reasons Driving Increased Post-Pandemic Turnover](https://blog.premployerinc.com/prblog/reasons-driving-increased-post-pandemic-turnover) Employers trying to compete in a high rate employee departure environment must recognize the current power held by employees and understand their... PRemployer Jan 11, 2022 Employee Benefits ### [Ways to Reduce Turnover Going Into 2022](https://blog.premployerinc.com/prblog/ways-to-reduce-turnover-going-into-2022) Know what to focus on to reduce employee churn rates as businesses everywhere get hit with the turnover tsunami. PRemployer Dec 7, 2021 Recruitment and Hiring ### [How to Know When It's Time to Hire a 2nd HR Employee](https://blog.premployerinc.com/prblog/time-to-hire-a-2nd-hr-employee) A human resource employee handles administration, manages payroll, oversees risk management, and ensures regulatory compliance. Do you need two HR... PRemployer Mar 7, 2019 ### Stay up to date with the PRemployer Blog! Keep up with the latest HR insights, rules, trends, and laws when subscribing to the PRemployer blog.