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The hidden cost

Updated: Aug 11, 2020

The cost of an employees turnover


To conduct business activities, companies require employees who are disclosed in the company’s P&L statement with significant salaries expenses. What happens when those employees leave, what are the risks and associated costs of employee turnover.


The cost of employee turnover is the cost of losing one employee position and those include, but are not limited to the followings expenses:

 bonus packages for leaving

 the associated cost for managing the role when it is not filled e.g extra working hours

 loss in productivity during the vacancy period

 errors in customer service

 loss in sales, for a salesperson - that will lead to decreased revenue and increased costs

 cost of hiring a new employee

 cost of training and cost of onboarding period of the new person

 loss of engagement from the other employees

 reputation - if the organization cannot retain employees then what does that say about the brand, and the company - turnover decrease

 culture - indirect impact on the financial results of an organization


The companies will experience some level of employee turnover no matter the employee retention policy in place. In the long term, the companies should focus on the right employee retention policy to diminishing the impact on profitability, culture, and productivity. The organization should strive for more efficient operations and higher profits by retaining its employees for as long as possible taking action to reduce employee turnover and improve their retention. Start improving employee turnover by recruiting an adequate team that is right for your organization.


Find out more about the hidden cost in the training course “Cost at speed by re-calibration and optimization” available to book online.


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