Turnover is disruptive, but also expensive. See how much it costs with this complimentary downloadable cost calculator … and then, show your boss.
Recently, Daily Advisor reported that surveys are showing employee retention as one of the top two concerns of HR professionals. (The other is regulatory compliance.)
If you have been begging top management for additional resources to hold on to your people, we’ve got something that will help your argument. It’s a way of illustrating the high cost of turnover … generally estimated at about a third of the salary of the employee who leaves.
The tool that will do it for you is a downloadable online Turnover Calculator developed by the editors of our sister BLR website, HR.BLR.com. HR.BLR.com is a subscription site, but the calculator is provided at no charge to Daily Advisor readers. Click here to download it.
Here are some of the elements that make turnover so expensive. They’re all provided for in the calculator.
Direct Replacement Costs
It costs a bundle to clean up after a departing worker and then to find someone new to replace that person.
–First, there is a mound of paperwork related to closing out or transferring benefits and making adjustments to payroll. There’s an exit interview, and the recordkeeping from that.
–Then, to find the replacement, there is employment advertising or recruitment services (which can run as high as 33 percent of salary of the new hire!) and staff time spent on screening, job interviews, and background checks.
–Finally, once you’ve found your replacement, you’ll do all the exit paperwork in reverse, signing the new person up for payroll and benefits, with additional bumps in cost to orient and train the person for the job.
–During the transition, someone has to pick up the workload. That often means bringing on temp workers, at their high rates of pay. And if you use a temp agency, you can be sure a markup on the cost of benefits is built into the price.
Indirect Costs of Turnover
Indirect costs are harder to estimate, but are absolutely a factor.
There is the cost of lost productivity as the new worker goes through a learning curve, and likely during the temp worker’s tenure as well. This period also may carry an additional cost as customers leave because of the reduced service they’re getting.
You can bet there’s a negative effect on teamwork and perhaps morale. And very likely, if the former worker didn’t like conditions on the job, that word will likely spread through the community. Your reputation may be damaged.
Anyway you cut it, turnover is expensive. Download the calculator, enter your company’s specific cost factors, and see just how costly it is for you.
And if you’d like to take a look at HR.BLR.com, the extraordinary website that the calculator came from (there are 5 calculators there, just for turnover, and many others for the rest of HR), or try the site in your office for 14 days free of any cost or obligation, click here.
For the other side of employee economics, compensation and benefits for those who stay, try BLR’s other outstanding HR-related website, Compensation.BLR.com, also yours free for 14-days. For details, click below:
Click here to learn more about or try FREE for 14-days, Compensation.BLR.com