What are the True Costs of Employee Turnover

Employee turnover is more than inconvenient. According to Gallup, “Employee turnover costs businesses $1 trillion each year.” This might seem like an exaggeration. Where do they get these numbers?

Turnover affects everything from recruitment costs to team morale, and the impact can be felt long after an employee leaves.

Here are some costs associated with turnover.

Recruitment Costs:

When employees leave, organizations need to fill their roles. This requires a robust recruitment program, including advertising job openings, using headhunters and recruitment agencies, interviewing candidates, and, finally, making that job offer. According to SHRM , the cost of recruiting new employees can be thousands to tens of thousands of dollars, depending on the role and industry. High turnover multiplies recruitment costs, chipping into an organization’s budget.

Training and Onboarding Expenses:

New hires require training to adapt to company processes and culture. The cost of onboarding new employees includes formal training sessions. It also includes the managers’ and colleagues’ time and effort to mentor and support new hires. This adds up when turnover is high. Constantly training new staff reduces efficiency. It can also be exhausting for everyone involved in the process – a slippery slope to burnout.

Lost Productivity & Disruption of Workflows:

High employee turnover can affect workflows. When a key team member leaves, work processes can slow down. This could cause delays. To avoid this from happening, other team members are often left to keep things as normal as possible. Extra work can lead to employees feeling overworked and burning out.

Decreased Team Morale:

Frequent turnover can cause stress, frustration, and a perceived lack of stability in an organization. This often leads to a negative work environment and potentially even more resignations, creating a cycle that is tough to break.

Damage to Brand Reputation:

A high turnover rate can tank an organization's reputation. This, then, can make it difficult to attract top talent. Potential employees aren’t just looking for a job title. They look at everything, including the company culture and reputation with former employees. If a company is known for having high turnover, it can stop great candidates from applying. This can make recruitment even more difficult, and, in turn, increase the cost of hiring.

Next post, we're going to discuss how you can head this at the pass. So much of turnover is completely avoidable . Implement meaningful policies to retain and attract top talent. Experience success.

What Are the True Costs of Employee Turnover

Understand the Hidden Costs of the Employee Revolving Door

Here are some costs associated with turnover.

Recruitment Costs:

Training and Onboarding Expenses:

Lost Productivity & Disruption of Workflows:

Decreased Team Morale:

Damage to Brand Reputation:

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