Recruitment Shouldn’t Be A Gamble. What Is The True Cost Of Employee Turnover?
The Society for Human Resource Management (SHRM) reported that on average it costs a company 6 to 9 months of an employee’s salary to replace a bad hire. Other sources have calculated the cost of replacing an individual employee can range from 1,5 x to 3,5 x the employee’s annual salary — and that’s a conservative estimate.
Employees leave organizations for a multitude of reasons.
Some employees find better leadership to support them, better-paying jobs, while increasingly others look for a better corporate cultural fit. Sometimes it is their choice and other times they follow a spouse who’s been transferred to another location. According to our latest survey, 34% of professionals working within the oil industry consider seeking “better work-life balance” as a #1 reason to leave their current employer.
Whatever the reason, it has been well documented that high employee turnover is costly and disruptive. It also impacts company culture, productivity, engagement, and overhead.
Imagine you were going to lose 30% of your workforce within the next 6–12 months, is your company ready for it?
The Cost of Attrition
The attrition rate is the term used for the amount of money employers lose due to employees leaving. Research by SHRM suggests that replacement costs can be as high as 50%-60% with overall costs ranging anywhere from 90%-200%. Because no two employees make the same amount, the cost of attrition has to be calculated on an individual basis, but using averages can still give you a ballpark estimate of the true cost of employee turnover.
Use our Good Hire Calculator™
Our post-placement service helps to deliver a 40% longer employment period than the industry average. Our Good Hire Calculator™ shows the true cost of a bad hire. If you employed someone and they have left your company within the last 12 months to calculate the price an early leaver really costs your organisation.