According to research conducted by the Society for Human Resource Management (SHRM), the average cost of replacing an employee can range from 50-200% of an employee’s annual salary (depending on the industry and position level). These direct costs include recruitment and training expenses as well as indirect costs such as: lost productivity, decreased morale and the time + resources associated with onboarding. In addition, turnover could potentially impact the company’s reputation and brand image resulting in long-term business effects. With this in mind, it’s safe to say when women leave their employer, it comes with a cost.
Companies lose more than they realize
The negative impacts of women leaving the workforce can be significant not only to the organization, but can also affect both the individual and society as a whole. While there are community involvement initiatives that align with corporate and social responsibility, the result of a company losing women equates to significant loss in multiple ways including, but not limited to:
- Economic impact: the loss of their skills and talents equates to decreased productivity within the organization. The impact on their wages could then lead to decreased consumer spending and overall economic activity.
- Talent shortage: a decrease of talented and skilled women in certain industries means higher costs for certain businesses. Because women bring diversity and diverse perspectives to the workforce; when they leave, innovation and creativity exit the organization as well.
- Gender pay gap: women who re-enter the workforce often face lower wages and fewer advancement opportunities. The impact is financial and detrimental to the trajectory of their career in the future.
6 Strategies companies should consider
Because of this, organizations should invest in retention strategies, create a work environment that promotes satisfaction and engagement in addition to ensuring there is a sustainable business model with women in mind. Aside from asking women what they value and what motivates them to stay with the company, I recommend taking action based on their responses as well as consideration of the following:
1.Celebrating Women’s History Month: This includes hosting events, webinars, or social media campaigns that recognize the accomplishments of women throughout history as well as women who currently work for your organization. Recognition is a key component of retention and when done well, it creates a positive work environment, inspires women to achieve their goals and improves performance. Celebrating women shouldn’t have one dedicated month in a year; it should happen throughout the year.
2.Providing equal opportunities: Women need, desire and deserve to have equal opportunities for career advancement, leadership positions + promotions. Equal opportunities also include: equal pay, benefits and ensuring performance evaluations are fair (based on skills and accomplishments as outlined in evaluation criteria).
3. Offering flexible work arrangements: Remote work options as well as flexible hours help women balance work and family responsibilities. As a result, they can simultaneously reduce stress and increase job satisfaction which is a win not only for women, but also for the company.
4. Providing mentorship, sponsorship and coaching: These programs lead to career advancement. In addition, this level of support produces skill-building opportunities and a sense of community.
5. Fostering a culture of diversity, inclusion and respect: By encouraging open communication, promoting respect and embracing differences, women feel valued and respected. In addition, Employee Resource Groups (ERGs) and Business Resource Groups (BRGs) provide a supportive community where women can network, share experiences, offer each other support and advice.
6. Leadership training and development programs: Offering leadership training programs specifically for women not only builds their confidence, it also prepares them for leadership roles which ultimately improves retention rates.