Turnover Costs

Monetary and hidden costs associated with employee turnover are also of concern.

When an employee leaves your business, it costs your company in:

• Productivity. When the employee leaves, productivity will usually take a downturn because other workers may have to add the former employee's duties to their own workload, at least temporarily.
• Money. In addition to the monetary costs associated with lower productivity, you may have to pay employees overtime to get them to take up the slack left by the former employee until a replacement can be found. You may also have to face unemployment claims and pay for the cost of recruiting and hiring a replacement.
• Time. Not only may you be distracted from your regular duties to cover for a former employee, but you will now have to spend time and money advertising, interviewing, and otherwise looking for a replacement employee. And don't forget the time that you spent training and hiring the former employee. When you lose a lot of employees, you're wasting time and money.

Once you find and hire a new employee, you will still experience flagging productivity while the employee learns his or her new job. Sometimes, depending on the job, temporary employees can pick up the slack.

In other words, it costs the business money every time an employee leaves because it takes even more resources to return to the same level of productivity or level of performance that you had before.

The flip side. Sometimes, though, if the worker in question was a problem performer, productivity may not suffer. In fact, you may be better off than if the dissatisfied employee had stayed on the job.

On the whole, though, you're going to want to prevent turnover as much as possible because of the high costs associated with it.