Cost of staff turnover
Financial and other costs to your business when a large number of workers regularly leave your employment.
When employees leave your company, it costs more than just hiring new people. Understanding these costs can help you take steps to reduce turnover and protect your business.
Financial and resource costs of staff turnover
When a staff member leaves, your business may face several direct costs, including:
Exit tasks
When an employee leaves, you will need to spend time on exit interviews and updating payroll.
Loss of skills
Losing experienced or skilled employees affects your team鈥檚 strength.
Covering vacancies
You will have to pay for temporary staff or overtime until you fill the vacant role.
Recruitment expenses
You will need to allocate time and money to advertising jobs or paying recruitment agencies.
Hiring process
You will need to dedicate time to reviewing applications, interviewing, and selecting candidates.
Onboarding new staff
Once you have appointed a new employee, you will need to spend time and resources to induct and train the new employee.
Training
You will need to invest in developing new staff to help them reach full productivity.
Hidden costs of staff turnover
Seeing others leave can make remaining employees consider quitting.
Increased stress and absences
Remaining staff may feel overwhelmed, leading to more sick days.
Missed deadlines and workflow interruptions
Losing staff disrupts projects and daily tasks.
Lower productivity and quality
Customer service and work standards are likely to drop.
Reduced morale
Losing popular or skilled employees can hurt team spirit.
Damage to reputation
High turnover can make your company less attractive to future candidates.
Vicious cycle of high staff turnover
High staff turnover can create a cycle where low morale leads to more departures, which further lowers morale. This cycle can seriously harm your business if not addressed.
Reducing staff turnover saves money, keeps your team motivated, and maintains your company鈥檚 reputation. Taking practical steps to improve retention is essential for long-term business success. See reduce staff turnover.