The True Cost of Turnover in Life Science
Deb Briffa explores why losing skilled Life Science talent could hurt more than your bottom line.
By Deb Briffa, Vice President, Global Client Lead, KellyOCG
The cost of turnover is a key metric for talent professionals. Many HR, procurement, and talent leaders know down to the dollar how much it costs to lose and replace a key role. LinkedIn reports that the cost of replacing a technical or leader-level employee can be as much as 250% of their annual salary. But in many industries, and particularly in Life Science, this cost extends well beyond the financial. A high rate of attrition can send waves throughout an organization, leading to significant knowledge and skills gaps alongside a wider sense of disharmony in your talent pool. This is a problem that is being felt across the Life Science community. A 2016 Compensation Force survey measured turnover in healthcare at 19.9%, second only to the hospitality industry.
I take a closer look at the true cost of turnover in Life Science, below.
Loss of Productivity
The costs of finding and training a researcher or lab technician may be significant, but are you measuring the costs associated with loss of productivity caused by a gap in your workforce? Project delays and failure to keep up with customer demand all incur a cost that can, in some cases, be traced back to turnover. Failure to put the right people in the right place may stop you from achieving your business goals.
Loss of Hard to Find Skills
Many Life Science organizations rely on a range of highly specialized skill sets. For some of these skill sets, the talent pool is also bunched inside a small geographical area. Finding skilled Life Science talent can be incredibly difficult and the scarcity of some skills means people can be costly to replace. The loss of internal skills can also mean you are less effective and less knowledgeable as an organization, inhibiting innovation and discovery.
Morale is a difficult thing to measure, but there is no question that a high turnover rate makes the wider workforce uneasy. This can become a destructive cycle, where the number of people leaving a Life Science organization directly fuels the number of workers who begin to look elsewhere. It can be a difficult habit to break and by the time you have noticed there is a problem, it may be too late to stop a rising exit rate.
Reducing Avoidable Turnover
It’s impossible to keep all of the people all of the time, but you can take steps to become a more attractive home for skilled Life Sciences talent. Many Life Science employers are already turning to retention bonuses to retain key talent, and I’m seeing high levels of competition across the sector. A small difference in compensation is all it takes to drive attrition rates through the roof. I believe that Life Science organizations must take the time to truly understand the markets in which they operate and be prepared to offer a competitive remuneration package that looks at a range of benefits, including salary.
However, it’s important to tackle this complex issue with solutions that stretch beyond financial rewards. Culture is a huge contributor in the fight to retain skilled Life Science talent and channeling resources to carefully review and refine your employer branding and employer value proposition can help to make your organization a most-wanted employer in the sector. It’s time to leave the traditional ‘all talent wants to work for us’ worldview behind. It simply doesn’t work in a competitive market, leading to poor retention and attraction rates.
Talent turnover is an unavoidable cost of doing business. But in Life Science it is crucial that organizations put their energy into keeping that turnover at acceptable levels. The loss of skilled talent could be the difference between becoming a market leader or falling behind the competition.
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