What is Your Organization's Cost of Turnover?
We compiled a collection of Cost of Turnover studies for you to use as a guide. The HiringSmart Cost of Turnover Calculator formulas are based on the average costs from the independent research listed below. If your organization is look to reduce turnover, consider using a pre employment assessment tool that has proven to reduce turnover up to 60%.
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Source |
Turnover Cost of an $8/Hour Employee |
Turnover Cost of an $80K Salaried Manager |
Documentation and Supporting Material |
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Society for Human Resource Management
|
$3,500 |
$70,000 |
Uncovering turnover costs can be a wake-up call, as it was for Walter Kalinowski, Director of HR for a company with 53 truck plazas. "We were hiring 200 employees per pay period. It was out of control. We had trouble finding people," said Kalinowski. He discovered his per-employee turnover cost was $3,500.
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Coca-Cola Retailing Research Council |
$3,637 |
$72,740 |
A major study of the employee turnover problem in the supermarket industry estimated total direct and indirect costs of replacing a supermarket cashier earning $6.50 per hour was at least $3,637.
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Cornell University Hotel School
|
$5,688 |
n/a |
Front Desk clerk, Miami hotel.
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Legislative Update, Alaska State Senator Kim Elton
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$8,000 |
$100,000 |
Hiring and training a new employee can cost from 50% to 200% of the position's annual salary.
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Hay Group study
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$8,000 |
$120,000 |
The cost of replacing workers range from six months of an hourly worker's salary to 18 months salary of a professional employee.
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Workforce Magazine – Survey on Employee Turnover
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$10,000 |
n/a |
45% of responding companies indicated that turnover costs are more than $10,000 per employee. |
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Cornell University Hotel School Study
|
$11,609 |
n/a |
Front desk employee, Hotel in New York City
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Saratoga's Human Resource Financial Report
|
$16,000 |
$104,000 |
Average turnover cost equals one year's salary and benefits. This can vary widely, depending on industry, with costs much higher for retail.
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Bliss & Associates Inc., Wayne, NJ consulting firm
|
$24,000 |
$200,000 |
Costs of lost productivity are as important as direct costs, such as advertising or temporary staff. Total costs easily reach 150% of the annual compensation. The cost will be significantly higher (200% to 250%) for managerial and sales positions.
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Research Average – Cost of Turnover, per departing employee
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$9,523 |
$108,963 |
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Research Average – Percentage of annual salary
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60% |
136% |
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Employee turnover is an enormous, hidden drain to the health and vitality of any business. The direct costs alone are sobering enough - but when you layer on the indirect costs - the toll mounts quick...
Death by a Thousand Cuts is Eroding Engagement and Killing Workplace Performance.
You can evaluate the effectiveness of your leaders by using the CheckPoint Management System. Quality leadership is a critical requirement for workplace productivity and employee engagement.