Employee turnover is more expensive than you realize.
The most frequently quoted statistic is between 3X and 7X their salary.
When you look at the list of potential costs below you soon realize the costs are more than you might have previously thought:
When they leave:
- HR or managers salaries to debrief and process out
- Severance pay if applicable
- Unemployment compensation
Finding the replacement:
- Advertising the position OR discussing who might be a candidate for moving up or over
- Interviewing new candidates –
- Human resources screening
- Team meetings/interviews
- Managers interview(s)
- Testing new candidates –
- Skills tests
- Drug tests
- Physicals and Medical Exams
- Training candidates
- Safety training
- Person specific equipment such as respirators, uniforms, etc.
- Orientation training
- Industry-specific training
- Other costs might include:
- Travel expenses
- Moving expenses
What else is included as a cost when they leave?
The lists above generally take into account the costs you can directly account for – the tangible costs. But there are other costs that may not be so obvious. Here is a brief list of potential costs to think about:
- Losing one or more customers.
- Lowered morale in other employees.
- Reduced commitment from those that stay.
- Increased workload on those that remain.
- AND the potential for both employees, clients, and investors to start looking for instability in the organization.