Case study: Employee turnover hurts more than you think

Farm Forum

Realistically, you know you’ll lose a few good workers over the years. But have you considered — and measured — what you lose each time an employee leaves?

A calf ranch operation in the southwestern United States did, and ownership found it was losing more than just a few helping hands.

Before investing in people

Throughout 2013, this calf ranch experienced an annual employee turnover rate of 81%. What’s more, the operation discovered it cost about $1,407 to replace each employee who left. This total cost accounted for only one week of separation pay and replacement hiring and training time. It did not factor in the other intangible costs. Turnover increased the workload and stress on employees who stayed. Morale suffered. Productivity fell. Safety incidents rose. Stress on the calves also rose because of inconsistencies among handlers. This created a big obstacle for the operation, which wanted to reach specific goals in the next year:

• Do more with less

• Create consistency with policies and procedures

• Increase employee engagement and job satisfaction

• Expand the calf ranch

After investing in people

In the spring of 2013, the owner of the calf ranch participated in a PeopleFirst Leadership Certificate Program course. There, he realized what he could accomplish through people. It required some changes in his management style. It also helped him realize the operation needed help reaching its goals. So at the end of 2013, he engaged several employees in an on-farm customized PeopleFirst employee development program. The owner wanted his employees to have the tools they needed to succeed.

Throughout 2014, the operation put these new skills to work. At the end of the year, results were measured. Not only did employee turnover decrease on the ranch from 81% to 54%, the business also saw additional impact and value1:

• Reduced employee turnover, saving the operation $11,256 in turnover costs

• Improved efficiency, the equivalent of 8.4 extra hours worked per manager per week

• Improved labor costs, saving $146,000 per year

• Boosted calf productivity and the number of calves per employee without compromising quality of care, adding $105,840 per year

• Improved calf health throughout the ranch expansion

For a small investment in manager and employee development, this operation saw $263,096 in return just one year after training.

“Keeping good people is the key to calf-raising, and making employees feel valued is a big part of that,” the calf ranch owner said.

This study represents the value of a good team on a typical operation. The success of your operation depends on your employees. Do everything you can to keep quality employees. For more ways to help develop your employees and get them excited about work, visit