A better hiring mood and a labor market overflowing with quality candidates could make CEOs complacent when it comes to retaining staff.
That would be a mistake according to Luke Vandermillen, vice president at advisory firm Principal Financial Group, who said employee turnover can be costly.
Citing estimates, Vandermillen said the one-time cost of replacing just one employee can be as much as 150 percent or more of their annual salary. Recruiting, hiring and training replacements for lost people add up and companies also suffer from lost productivity and intellectual capital, he added.
As the labor market heats up, companies need to think more about how to retain employees who have more options open to them, said Vandermillen.
“Benefits can play a role in retaining employees,” said Vandermillen, whose firm just released its annual guide that helps businesses reduce worker turnover by better managing benefits policies. “The companies that really seem to do a good job of this really stay the course as it relates to their benefits.”