Corporate culture in numbers
2 min read

Corporate culture in numbers

Corporate culture in numbers

Corporate culture is a relatively difficult topic to grasp, some develop organically, some consciously build but unfortunately most companies still don’t address it.
They may not see the potential in it, they may focus on other tasks, they may not feel mature enough to do so.
A healthy and accepting corporate environment has numerous benefits that affect corporate profit growth:

  • people will be more productive, team work will be smoother
  • faster and better decisions are made
  • if they communicate well, more and better workers apply for a job
  • fluctuation decreases

An example of each of the above can be found to calculate and quantify returns.
Let's look at the last example of fluctuation.
The average staff turnover in the IT sector is 13.2% which is relatively high compared to other sectors.

Take a 60-person SaaS product development company, which means ~8 people a year, so an average of 8 people need to be replaced.

Recent data estimates that it costs as much as 33% of a worker’s annual salary to replace.

Josh Bersin of Bersin by Deloitte breaks down key factors that contribute to the costs of losing an employee, he said:

Consider the real "total cost" of losing an employee:

  • Cost of hiring a new person (advertising, interviewing, screening, hiring)
  • Cost of onboarding a new person (training, management time)
  • Lost productivity (a new person may take 1-2 years to reach the productivity of an existing person)
  • Lost engagement (other employees who see high turnover disengage and lose productivity)
  • Customer service and errors (new employees take longer and are often less adept at solving problems). In healthcare this may result in much higher error rates, illness, and other very expensive costs (which are not seen by HR)
  • Training cost (over 2-3 years you likely invest 10-20% of an employee's salary or more in training, that is gone)
  • Cultural impact (whenever someone leaves others take time to ask "why?").

"When the formula is applied to the median employee’s salary of $45,000, the average cost of turnover per employee comes out to $15,000"

For 8 people, this amount is $120,000 per year!

If you are interested in how much staff turn over costs you per year and how much you could save on it, check out our ROI calculator.

We believe this is the amount that even the most skeptical leaders need to realize that this problem needs to be addressed not only for social but also for financial reasons.