Gone are the days when skilled professionals dedicated their entire careers to a single company. Today, the average tenure for workers between the ages of 25 and 34 is just 3.2 years. In the marketing industry, this number is even lower, with one of the highest turnover rates at 19.8%.
When a new employee joins a company, it takes approximately three months for them to reach full capacity. Combined with legal and hiring costs, ensuring that talent stays in your agency is crucial. Replacing an employee can cost between 10% and 30% of their annual salary. A low retention rate doesn’t just disrupt the workplace environment and consume work hours—it directly impacts the agency’s profitability.
How is turnover cost calculated?
The cost of employee turnover is calculated by adding:
- Vacant position coverage costs: The number of days the position remains unfilled multiplied by the daily rate. During this time, tasks are often reassigned to other team members, creating workload imbalances and reducing productivity.
- Hiring costs: This includes HR team salaries, job advertising, candidate assessments, interviews, and the time spent by employees in the hiring process. These resources could otherwise be allocated to improving the agency’s overall performance.
- Onboarding and training costs: A new hire requires integration and training, meaning the first few months are less productive and require investment in mentorship and guidance.
- Productivity ramp-up costs: Every new employee goes through a learning curve before reaching optimal efficiency. During this period, productivity may slow down, affecting overall profitability and project timelines.
For example, an agency with 200 employees and a turnover rate of 19%, with an average annual salary of $50,000, incurs an estimated turnover cost of $638,324 per year. This highlights that retaining talent is not just about company culture—it’s a strategic decision that directly impacts profitability.
Reducing turnover in agencies
Lowering turnover starts with an effective hiring strategy. This means not only recruiting candidates based on their technical skills but also ensuring they align with the agency’s culture and values. Additionally, it is essential to continuously evaluate KPIs and metrics to optimize the effectiveness of the hiring process.
Once an employee is hired, onboarding should be a structured and data-driven process. This means going beyond a basic introduction to the company—it should include specific training, team integration meetings, close mentorship, and tools that help new employees adapt quickly. By leveraging insights from KPIs, profitability reports, and service performance metrics, agencies can identify business needs, allocate resources more effectively, and make informed decisions that enhance employee experience and retention.
Time tracking as a key to preventing burnout
COR includes an advanced time-tracking feature that optimizes project planning and prevents workload imbalances. Every time a team member is assigned a new task, their available work hours are updated in real-time, allowing for a more balanced distribution of work and avoiding bottlenecks.
This functionality not only enhances team organization but also provides immediate visibility into each employee’s workload. If an employee is at full capacity, managers can quickly assess their workload and adjust assignments accordingly. This proactive approach helps prevent burnout, improve efficiency, and create a healthier work environment.
Furthermore, by having a clear view of time distribution across projects, agencies can make more strategic decisions, boost profitability, and ensure a work culture that minimizes employee exhaustion. Transparency in time management directly contributes to employee productivity and well-being, fostering long-term sustainable performance.
Retaining talent in agencies
To reduce turnover, agencies should prioritize:
- Competitive salaries
- Employee recognition and rewards
- Continuous feedback
- Strong performance review processes
- Clear career growth opportunities
Creating a work environment where employees feel valued and motivated over the long term is essential. Open communication and transparency in decision-making strengthen team commitment, reduce uncertainty, and increase job satisfaction.
However, understanding employees’ needs isn’t easy without accurate data. Having clear insights into agency operations helps avoid unnecessary costs and invest resources effectively. It also allows agencies to identify improvement areas in employee experience, ensuring sustainable growth for both the business and its workforce.
