Employee turnover is the process of replacing one employee with another.
When someone quits their job, and then someone new is hired to fill that role, that’s turnover. Generally speaking, if companies have lots of turnover, it’s seen as negative because it means employees aren’t happy or there is a management issue.
Low turnover means that employees stay at a company for a long time, while high turnover means that people are being hired, leaving, and then companies have to rehire again often. This can impact profit, morale, and productivity, so it’s something most companies try to avoid.
Why Is There a Cost to Employee Turnover?
Because employee turnover impacts things like productivity, meeting goals, communication, and the overall culture, the costs can be very high.
In fact, a study by Work Institute found that it can cost as much as 33% of an employee’s annual salary to replace them. If we factor in the cost of hiring new employees and training them, the disruption to workflows and client work, and the effect it has on other employees and their productivity, this makes sense.
And without a bulletproof training program for new employees, there will ultimately be a learning curve and mistakes made by new hires in the beginning. If one role has lots of turnover, it’s unlikely that detailed and accurate notes are being kept on what the responsibilities are or what targets have been met. This makes it harder for someone to jump in and fill that role without making mistakes.
Plus, advertising for a new position can take time and money, especially if a company uses a paid job board. All these can add up to be very expensive, which is why employee turnover is usually seen as a bad thing and companies try so…