There are a number of costs associated with staff leaving. The obvious ones are time and money, but there are also some hidden costs.
Staff turnover: monetary and time costs
When a member of staff leaves, there may be costs associated with:
- leaver administration tasks, eg exit interviews and payroll changes
- covering a vacancy until it's filled, eg through the use of temporary staff or overtime payments
- advertising for a replacement or using a recruitment agency
- dealing with recruitment and selection tasks, eg checking applications, and organising and attending interviews
- the induction and training of the successful applicant
The hidden costs of staff turnover
When a member of staff leaves, you may also experience:
- other staff expressing a wish to leave
- higher levels of stress-related absence
- interruptions to workflow and missed deadlines
- a reduction in productivity or levels of customer service
- a drop in staff morale, particularly if the leaver was popular and good at their job, and/or you need the remaining staff to take on the leaver's work
Rising employee turnover often develops into a 'vicious circle' as low morale causes more workers to leave, which in turn reduces the morale of those who remain, and so on. Taking practical steps to reduce staff turnover will help your business avoid the costs associated with high employee turnover.