SRC, an Aetna company | Employee Turnover

The Costs of Turnover. what does turnover actually cost?

The impact of turnover on a company's bottom line is significant in both direct and indirect costs.

Direct costs are what you spend to recruit and train replacement workers.

Indirect costs include:

Lost productivity
Lowered morale among employees left to cover for the missing worker
Customer dissatisfaction from dealing with new and inexperienced employees

What is it costing your company?

Unfortunately, that's not easy to answer. In part it depends on three things:

The cost to recruit replacements
The training required to establish a new employee
The value you place on lost productivity

A Society of Human Resource Management study estimated this cost to be 30-32% of annual pay. A $6 per hour position might be costing you $7.92, simply because of turnover.

Probably more than you think.

It's much harder to place a cost on the negative feelings of employees and customers. To what extent does lowered morale contribute to even more turnover? And as for customer dissatisfaction, it has been said that a bad customer experience is retold eight times. The loss of customers can cost a business a great deal!

The direct and indirect costs of employee turnover can greatly impact a company's bottom line.