How Much It Really Costs an Organization When Workers Leave

How Much It Really Costs an Organization When Workers Leave

Most companies’ dedication to employee retention is driven by a wide variety of factors. To begin, the cost of employee turnover is typically 1.5 to 2 times the departing worker’s annual salary. However, there are hidden costs that should be considered. These expenses are over and above those associated with making up for lost output, advertising the position, and training a replacement worker. These costs may have a major effect on a company’s bottom line and morale if they were made public. Implementing the strategy is more easier than you may think, and it has the potential to save a lot of time, effort, and money. So what is the cost of employee turnover?

A company’s first priority should be to reduce employee turnover. Reason being:

Employee turnover might have a negative effect on morale. Employees who see the departure of peers typically reevaluate their own decisions to leave. This thought has the ability to dampen spirits and damage the company’s culture. While it’s impossible to make every employee happy, you can reduce turnover by addressing the root causes of employees’ dissatisfaction. High turnover companies also have a bad reputation in their field, which makes it harder to acquire competent workers.

Employee turnover is expensive for any business.

The true cost of staff turnover is difficult to pin down, but even the most optimistic projections present a bleak picture. According to, it costs an average of $1,500 to hire and train a new hourly worker. Technical professionals should expect to get between 100% and 150% of their regular pay. If the individual is vying for a position at the C-suite level, the price might reach up to 213% of their yearly salary.

When workers often leave their positions, productivity drops.

A new hire may need anywhere from one to two years to reach the same level of productivity as an experienced employee. Companies lose money when employees spend time acquiring new skills, getting used to new systems, and figuring out how to work effectively with their coworkers. The loss of a colleague may have an adverse effect on the spirits of others still working there, which can have a chilling effect on their output. The longer the position remains unfilled while a replacement is sought, the more pressure will be put on the remaining staff to get everything done on time.

As a result, how much does it really cost to replace one employee?

If you want an accurate assessment of the cost of replacing an employee, you need to consider more than simply the cost of recruiting a new member to your team. The costs of advertising the position or hiring a recruiter, conducting interviews, and then training the successful applicant are all readily visible.

An organisation associated with the Society for Human Resource Management estimated that it would cost six to nine months of salary to find and train a replacement worker. If an employee is making $60,000 per year, it will cost $45,000 to find and train a suitable successor.


There are further, less obvious repercussions, such as the impact on coworkers, the potential damage to the company’s reputation, and the loss of productivity associated with bringing on a new employee and teaching them the ropes.

Clare Louise

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