Posted by Adaptable Leadership - Building Leaders for Changing Times on 8/18/2008

The number one reason an employee leaves a company is because of their manager. The leader that employee's work for determine who sticks around and who hits the road. Employee turnover costs are substantial ranging from 150% to 250% of an employee's annual compensation. That means to replace an employee that makes $100,000 it will cost the company $150,000 to $250,000. If you can reduce your employee turnover then clearly you will reduce your bottom line. Extraordinary leaders make a substantial impact on employee turnover and therefore, the bottom line.

In The Extraordinary Leader the authors report on a study from an insurance company looking at employee turnover. The chart in this blog depicts the results. The bottom 30% of leaders have a turnover of 19% while the top 10% of leaders keep their turnover to less than half of that. Leadership Effectiveness highly correlates with employee turnover. Employee turnover cost companies millions of dollars every year. It is clear that extraordinary leaders make a substantial impact on the money saved by their employer. Great leaders do matter... Really!