Smart businesses are concerned about turnover, because turnover is expensive. When you need to replace an employee, you’re out the following costs.
High Cost of Employee Turnover
Recruiting costs. These can be high or low, depending on your organization and the level of the position. A grocery store that is constantly recruiting and hiring cashiers doesn’t have a huge incremental cost to recruiting one more person.
But if you’re looking for a Chief Information Officer – a highly specialized job – you may have to hire a headhunter, and that can cost you around one-third of the final annual salary. That’s a big chunk of change.
To keep reading, click here: The Costs (and Benefits) of Employee Turnover
I noticed that “small businesses” was referenced in the first line as the one’s being concerned over the costs of turnover. Am I reading into this too literally, or is it really just small businesses that find turnover expensive? I ask this because I have found a trend with large, public companies where it seems manufactured turnover is the preferred business model. Many workers are contractors, hired for short runs and then let go before they can legally be considered employees. Despite the fact that logic would dictate having large portions of the workforce consisting of no person with more than 6-12 months experience would be a drawback, apparently this is the most profitable format since everyone is doing it.