The True Cost of a High Turnover Rate & How Your Business Can Avoid It

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By Lisa Hutchinson

Topics: Job Search


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The True Cost of a High Turnover Rate & How Your Business Can Avoid It.jpgA high turnover rate is something that can significantly affect a company’s financial account. Although desirable, it is unrealistic to aim for absolutely zero employee turnover. It is, however, achievable to get your employee turnover rate to a low percentage.

The costs of replacing an employee differs based on the position of the individual, the company, the country, and more. Additionally, the costs companies need to consider are not only associated with the employee leaving, but also the costs of the recruitment steps for the replacement.

On a reassuring note, a high employee turnover can be avoided. It takes some strategy and involvement from the employer, but it is definitely doable.

Let’s break down the costs following a high turnover rate:

A Decrease in Productivity and Increase in Overtime

In the time that a position remains open, some of the tasks of the former employee are neglected.

To keep a business sailing smoothly, extra work will then be allocated to other employees, adding to their existing duties. To complete all the work, therefore, they may have to do a lot of overtime. The result then would be overworked, unhappy staff. A further loss for the company would be a decrease in the quality of work along with more departures, if the remaining employees are unsatisfied with the company performance at that time.

Recruitment and Training

With temporary staff and full-time hires alike, training is a must. This is also the case for new hires that may have a higher level of experience. Although the training may be different, these individuals still need to get accustomed to the routine developed by the former employee as well as the practices of the company.

How can we avoid a high turnover rate then? Here are a few approaches:

Hire Strategically

Losing an employee can leave your business in a bit of a predicament, for there will be tasks temporarily not being completed. In an effort to seamlessly integrate new employees with your company culture, recognize what your former staff did well and look for those qualities and talents in potential candidates.

If you do not have time to devote to recruitment, look into staffing agencies to do the work for you. With the information you provide them, these agencies can effectively look for matching candidates.

Provide a Warm Work Environment

Ensure that you provide a healthy work environment, one that is conducive to a higher degree of efficiency. This type of environment will encourage employees to stay in your company.

A hospitable environment is not only necessary for full-time staff, but it is also important to show the same kindness to temporary workers, interns, part-time staff, and everyone else who joins the team.

You can’t always predict the reason an employee will choose to leave a company. Reasons may concern the company, while others may solely be personal choices regarding family needs, career changes, and so on. Indifference and insensitivity are qualities you do not want to show your staff, for they will then proceed to remove themselves from that environment.

A happy team will ensure steady attendance and a strong work ethic. Happiness with their work environment will also keep employees motivated.


Lisa Hutchinson

I started with Liberty Staffing in 2004 as the Regional Business Manager of the London office. I have over 20 years of experience in the customer service and retail sectors, as well as leadership experience including Store Management, People Development and Recruiting. In 2016, our London location moved to a larger office in order to accommodate growth of our business, which included adding a Clerical Division.

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