How Much Is Employee Turnover Costing Your Company?
A conservative estimate of the cost of turnover for hourly employees is 25 percent of their annual salary. A search for studies about costs associated with hiring and employee turnover places the actual expense closer to 50 percent for hourly employees—and many times higher for management, professional, sales, and other key positions—when you consider lost opportunity costs, lost productivity and even theft, absenteeism and other counterproductive and disruptive behaviors.
High turnover costs are not isolated to big business. A small business paying an employee an hourly wage as low as $7.25 per hour incurs the minimum cost of $3,625.00 (25% x $14,500.00) every time an employee leave voluntarily or involuntarily. Other examples of turnover costs are:
- $9.00 per hour = $4,500.00 per employee
- $10.00 per hour = $5,000.00 per employee
- $15.00 per hour = $7,500.00 per employee
- $20.00 per hour = $10,000.00 per employee
Listen to The High Cost of a Bad Hire – Ira S. Wolfe, Recruiting and Hiring Top Talent
While those are the costs for hourly wage employees, salaried employee turnover costs range from 1.5 times annual salary to upwards of 14 times annual salary.
Don’t wait until turnover costs become so high before you implement an ongoing retention program. Find out why employees leave your organization and what you must do to find out why others stay.
Survey your top performers now in order to find out what keeps them there, why they might leave, what type of competitive offers they may find attractive, and what they need to be happier and more productive in their jobs.
Click here to view a compilation of employee turnover studies.