Companies that provide their employees with a healthy work/life balance can reduce turnover significantly and potentially save millions of dollars. But what constitutes a healthy work/life balance and how can companies achieve that goal?

First, let’s look at the numbers. A recent Hay Group Insight study found that potential future turnover among organizations that are perceived to offer a poor work/life balance is ten percentage points higher than potential future turnover in organizations that rank in the top 20% in terms of work/life balance.

The study found that 27% of employees in the former organizations plan to leave their employers within the next two years, compared to 17% in organizations at the top in terms of work/life balance offered. To put this difference in monetary terms, the Hay Group Insight assumes that this level of turnover will occur among employees earning $35,000 per year and that replacing these employees will cost companies half of each departed employee’s salary ($17,500 per employee). Using those assumptions, the additional turnover experienced by companies with a poor work/life balance would cost an organization with 10,000 employees an estimated $17.5 million over two years.

To achieve the high level of work/life balance necessary to avoid this additional turnover and collect this work/life dividend, companies need to look beyond the usual efforts in this area. For example, telecommuting programs and flexible work schedules are a good start but they alone are not enough, says Mark Royal, senior principal at Hay Group Insight who conducted the study.

Instead, Royal traces employee work/life dissatisfaction to the pressure on employees to achieve more and more with fewer resources, a circumstance that has been widespread since the recession. Therefore, achieving a better work/life balance will require a long-term strategic endeavor and management’s willingness to address this underlying issue. For example, companies can focus on efforts to help employees work more productively and to rebuild their workforces with the ultimate goal of helping employees to become more efficient in their work, “leaving more time to attend to personal responsibilities and garnering higher levels of organizational loyalty,” says Royal.

These efforts are likely to pay in ways beyond reducing turnover. Companies recognized as leaders in work/life balance are also more likely to see greater employee satisfaction when it comes to pay levels. Among these organizations, 58% of employees believe that “I am paid fairly for the work I do,” compared to just over one-third of the employees working in organizations with a poor work/life balance.

These strong work/life companies are also viewed by 71% of their employees as having a good or very good ability to attract high quality employees. Only 45% of employees in companies with poor work/life balance say the same.

Even as the stakes are high for companies that want to improve the work/life balance available to employees, employee concerns about work/life issues continue to grow. Last year, 39% of employees in the Hay Group Insight’s study said that they have a good work/life balance, compared to 32% in 2011.