Employers are often left in the dark when determining what the actual costs they are absorbing when an employee leaves their organization whether voluntary or involuntary.
For example, a recent study found average costs to replace an employee are: 16% of annual salary for high-turnover, low-paying jobs (earning under $30,000 a year). For example, the cost to replace a $10/hour retail employee would be $3,328. 20% of annual salary for mid-range positions (earning $30,000 to $50,000 a year).
There are many factors that will help calculate the true employee turnover costs such as Separation Costs (cost of time in trying to keep the employee, costs of exit interviews, loss production, etc), Vacancy Costs (obtaining substitute personnel, overtime issues, revenue loss, etc), Costs of hiring a new employee (background checks, drug testing, interview hours, etc), Training costs and Soft Costs (loss of knowledge, loss of other employees, decrease in employee morale, damage to reputation/brand, etc).
When all of the factors are weighted you are able to identify what those true figures look like.
It is a powerful and important practice for every business to go through.
SO what’s your number?!