Putting a dollar figure on the cost of employee turnover allows business owners to grasp the impact employee turnover on their bottom line. It turns an HR problem into a business problem. Research by the Center of American Progress estimates the cost of turnover at 16 percent of an employee’s annual salary in jobs paying less than $30,000 a year. A “back-of-the-envelope” calculation shows this amounts to at least $2,500 per caregiver. This is a staggering number. That’s why we are addressing the topic caregiver retention during the month of October.
What is turnover?
Turnover is the rate at which employees leave their employer. It is calculated by dividing the number of employees whose employment ended by the total number of employees.
Here’s an illustration of how to calculate turnover rate in home care. During the month of September, Home Care XYZ lost 6 caregivers out of 90:
Three caregivers terminated for no show,
One caregiver was terminated for cause,
Two caregivers resigned to pursue other interests.
The turnover rate is 6/90=6.7%.
Similar calculations can be done on a quarterly and annual basis. Turnover is one of the easiest HR Metrics to measure and track. Turnover gives a measure of the health of an organization.
The average annual turnover rate of home caregivers is 45 to 70%. Caregiving is one of the occupations with the highest turnover rate. How can your agency do better?
Your retention masterplan
Improving the turnover rate and increasing retention happens when there is a plan in place. A solid retention plan focuses on increasing caregiver job satisfaction and creating allegiance to your agency.
According to a 2015 study by the University of South Carolina, “communication with the supervisor and support on the job contribute greatly to caregiver satisfaction.” Interestingly, support also plays an important role in weakening the impact of job-related stressors for caregivers.
Communication takes different forms:
1. Regular communication from the office helps keep your caregivers “in the loop” of what’s happening. Caregivers can feel isolated working in clients’ homes. Use your messaging apps and communication portals to send regular snippets of information.
2. Verbal praise from a supervisor is the simplest and most valued form of recognition. Being caught doing good is the most powerful thing you can do to make caregivers feel good about work.
3. Recognition from clients. Caregivers want to make a difference in the lives of their clients. Getting their recognition makes a huge impact on their job satisfaction.
Don’t neglect the impact of monetary incentives to keep caregivers with your agency. I know what you are thinking. “I can’t afford to pay them more.” Remember the cost of losing them? How much of a pay increase can you fund with $2,500 per caregiver who doesn’t leave?
1. Awards in cash or paid time off are also high on the list of caregivers.
2. Pay raise – Although money can’t buy happiness, it contributes greatly to keeping your caregivers happily employed with YOUR agency.
Contact me today to work on a retention plan that will work for YOUR agency.