Budgeting for Employee Turnover Cost
Employee turnover cost is more expensive than people think. On average, employers spend $4,129 per hire. Depending on the role you’re filling, some of these costs can be tracked and calculated but others are harder to gauge, like the impact on employee engagement.
Employee turnover cost is expensive – more so than you might think. Some costs are more easily calculated than others. Easily measurable or not, they all hurt your bottom line. Fortunately, many of the costs of turnover can be measured, predicted, and budgeted for.
As we mentioned, on average employers spend $4,129 per hire. Why all that money to hire?
- Recruiting and hiring – position advertising, background checks, other pre-mployment testing, internal operational costs for the time taken to market the job, applicant screening and interviews. Get our ultimate employee onboarding guide here.
- Onboarding – costs of orientation and training materials, additional training and supervisory time for the new employee.
- Effect on remaining staff – extra work and overtime during hiring process, cross-training and time to check the new employee’s work, the effect on morale after termination.
- Productivity loss and mistakes – time for the new employees to get up to speed.
Do you know how long it takes on average to fill a position?
It takes on average 42 days to fill a position!
This Budgeting for Employee Turnover infographic gives you the statistics on employee turnover with some practical tips to encourage retention–the easiest way to budget for employee turnover costs.
Employees are critical to business: have a plan to retain them
Organizations with higher employee engagement experience:
- 41% less absenteeism
- 24% less turnover
- 17% more productivity
How do we encourage retention to reduce employee turnover cost?
Balance work and play
Employees are 31% more likely to leave if they feel overwhelmed.
Employees who feel micromanaged are 28% more likely to think about leaving.
When offered a comparable fake job, 42% of respondees without friends at work accepted, only 21% of those with friends accepted.
Our HR Guides help small businesses reduce employee turnover cost by setting the stage for a great employee experience before their first day.
Article resources listed here.