Worker Turnover: A Hidden Cost That Consumes Your Profits

Ottawa, ON – Did you know that the cost of replacing a single worker can be as much as 150 per cent of their annual salary? Do you know what your turnover costs are?

‘Turnover’ is the rate at which workers leave and are replaced on your farm. Many farmers don’t know what their turnover cost is, yet it can have a major impact on the productivity and profitability of your farm.

Employee turnover is a costly issue for farms across Canada. Once you’ve hired motivated, committed, and qualified people, it is key to retain these workers. While turnover is a natural part of business, avoiding unnecessary turnover will ensure that your business is as productive and profitable as possible.

The Canadian Agricultural Human Resource Council (CAHRC) has developed two new tools to help you calculate and understand your turnover costs and see how your turnover compares to the agricultural benchmarks for your province and commodity.

The first tool is CAHRC’s Cost of Turnover Calculator which estimates the financial cost of each worker departure. The tool calculates your estimated costs for employee wages and benefits, separation costs, hiring and training costs, and cost of employee ramp-up time. It provides important information on the health of your business. The results of your business’s turnover costs can be downloaded for your records.

The second tool is CAHRC’s Turnover Benchmarking Tool which benchmarks your numbers against other farms in your province or commodity, and lets you find out if your turnover rates are healthy or hurting your business. High rates of voluntary turnover may indicate that you need to change the way you hire or manage your workforce.

To address issues such as retaining workers and reducing voluntary turnover, CAHRC has a variety of agriculture-specific human resource tools designed to support modern farm operations to manage their workforce. CAHRC offers Agri Skills, online and in-person training programs, and the Agri HR Toolkit – an online resource guide and templates to address the HR needs of any business.

For agricultural organizations there are customized labour issues briefings that apply new research to specific commodities and provinces, to explore the labour implications within their specific area. For more information on these and other CAHRC offerings visit www.cahrc-ccrha.ca.

The Turnover Calculator and Benchmarking Tool research were funded in part by the Government of Canada’s Sectoral Initiatives Program.