How to Use an LMS to Reduce Staff Turnover

Glasgow (SCL), March 2016 - A learning-management system (LMS) can save the average business a great deal of time and money, according to the results various research projects brought together in an e-book by Create eLearning.

According to Create eLearning, an LMS can

  • drastically reduce the cost of recruiting, selecting, and training workers
  • improve workers’ productivity throughout their career with their employer
  • reduce the pressure on an organisation’s workforce caused by worker vacancies

Mark Taggart, Create eLearning’s chief executive, explained, "Employee turnover means inconvenience, time, and budget losses, as well as temporary workforce overload and hiring replacements among other things. The cost of replacing a worker is the sum of various costs, including numerous interviews, the on-boarding (induction) process, and the opportunity costs of not being able to undertake projects because you don’t have the workers with appropriate skills."

According to Eremedia, the actual cost of replacing one "low-tier" worker is thirty to fifty per cent of her or his salary. Replacing "mid-tier" workers costs up to 150 per cent of their salary, while hiring new "high-tier" workers costs some 400 per cent of their annual salary.

There is evidence to suggest that the average rate of employee turnover for all industries in 2014 in Western economies was 15.7 per cent. Applying this to an "average" business of just sixteen employees suggests that this business will have two vacancies each year – and, even for low-tier workers, the costs of replacing these people can be substantial.

"While there are many reasons why workers leave their job - including corporate culture, salary level, flexibility, engagement, and development opportunities – an LMS can help solve and improve most of these issues," said Mark.