Every company goes through employee turnover. The US Bureau of Labor reported a 3.6% average turnover rate across all industries in 2018. The number isn’t huge, but it the turnover can have an increased financial impact because of the potential loss of institutional knowledge. How much would a 3.6% turnover cost your organization?
According to recent data from Work Institute, the estimated costs of employee turnover ranges from 33% up to a whopping 200% of the departing employee’s salary. So, for an employee making $50,000 a year, the value of the knowledge lost can be calculated at $100,000! Don’t believe me? Calculate the cost of your own organization’s knowledge loss with this knowledge loss calculator.
That’s a lot of money! Here are 3 expert tips that can help your team stay productive while minimizing the costs associated with employee turnover.
There are a couple reasons to cross-train employees:
- Encourage employee development by enhancing their skill set.
- Combat the mundane day-to-day activities of certain jobs by exposing employees to new atmospheres.
- Increase security with checks and double checks.
Perhaps the most critical reason to cross-train is to prevent knowledge loss for security reasons. By having multiple employees responsible for, or even just understanding the roles of the same job, you prevent a single point of failure. A single point of failure can occur with or without turnover, for example if an employee goes on vacation or takes a leave of absence, it’s imperative that another employee has the knowledge and skills necessary to fill in.
Collaborating is a great way to keep your team engaged and sharing knowledge. By placing your employees in an environment where they are working together, organic knowledge transfer will naturally occur, meaning that your team will learn and grow through the natural process of asking questions and receiving answers. In contrast with forced knowledge transfer, organic knowledge transfer is more valuable because it promotes a natural instinct to learn.
Another advantage to collaboration is that it enhances cross-training. Learning from one another about what they are doing and who they are working with allows you to pick up the slack in the event that something happens.
Finally, collaboration promotes workplace satisfaction and camaraderie through teamwork. Your employees are asking for more collaboration, and it’s in your company’s best interest to give it to them. It’s a win/win.
One of the most effective ways of preventing knowledge loss is through documentation. Unfortunately, it’s also one of the most overlooked methods because it’s so tedious. Most employees or managers do not want to take the time to document the elements of their job or processes that go along with it because they simply don’t have the time. Or, they feel like there are more important things that they could be working on. This is entirely the wrong mindset to have.
Think about it this way, the time that you spend upfront on documenting the important pieces of your job is an investment in your company’s wellbeing. Sure, you are spending a little money by diverting your employees from their day-to-day activities to document their work in a knowledge management system. But, you should start thinking about the money you saved by having a knowledge management system. The obvious benefit is that another employee won’t have to rediscover knowledge that your company already has. Perhaps more importantly, newer employees won’t have to divert senior employees’ attention to answer questions that have already been documented. When you see the complete picture, you realize that the investment costs are truly insignificant.
These tips all have one thing in common — they all suggest a change in your company’s culture. There are no tools to prevent knowledge loss, but there are tools that can help you in your quest for increased productivity. Changing your company’s attitude about the importance of knowledge management is the only way to see a real return on investment.
Are you ready to change your company culture? Check out how knowledge-driven productivity can help.