Just how much money are we talking about? To find out, check out our free, 20-page eBook, and learn how to improve employee retention with these best practice tips.
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Employee turnover costs money. A lot of money. Money that you can’t afford to lose. Just how much money are we talking about? Check out these statistics:
- Some studies predict that every time a company replaces a salaried employee, it costs 6 to 9 months’ salary on average. For a manager making $40,000 a year, that’s $20,000 to $30,000 in recruiting and training expenses.
- But others predict the cost is even more and that losing a salaried employee can cost as much as 2x their annual salary, especially for a high earner or executive-level employee.
These large numbers make sense when you break down the actual total costs of losing an employee. These costs include the following:
- Customer service and errors: (given the assumption that new employees take longer and are often less adept at solving problems).
- Training: Over 2-3 years you likely invest 10-20% of an employee’s salary or more in training.
- Cultural impact: Whenever someone leaves, others take time to ask “why?”
- Hiring a new person: Factor in the costs of advertising, interviewing, screening, hiring, etc.