The True Cost of
Employee Turnover

The Hidden Costs Beyond the Obvious

Use our Wellbeing Calculator to Assess Your Potential Savings

By using our wellbeing calculator, you can quantify the impact of employee turnover on your organization and identify areas for improvement.

Complete the following values to estimate the cost of turnover at your organisation:

people
%
$

Estimated cost of turnover
at your organisation:

$10,000,000

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This calculation is based on the national average replacement costs of an employee being 100% of their annual salary, when you include both direct and indirect replacement costs.

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Uncovering the True Cost of Turnover

For too long, we've underestimated the true cost of employee turnover. While direct costs like recruitment fees and advertising are evident, the indirect costs that we now understand and can measure, that some call ‘the ripple effect’ can be far more significant, and total up to 2.5x an employees annual salary. 

Direct Costs of Employee Turnover

  • Recruitment Fees: Paying recruitment agencies or job boards.
  • Advertising Costs: Posting job ads on various platforms.
  • Onboarding Costs: Time and resources spent on new hire orientation and training.

Indirect Costs of Employee Turnover

  • Loss of Productivity: Reduced output during the vacancy and onboarding period.
  • Decreased Morale: Negative impact on remaining employees' morale and engagement.
  • Customer Impact: Potential loss of customer trust and business due to service disruptions.
  • Intellectual Property Loss: Risk of losing valuable knowledge and expertise.
  • Increased Stress and Burnout: Higher workload for remaining staff, leading to potential burnout.
  • Damaged Company Culture: High turnover can erode a positive company culture.

The Operational Impact of Turnover on HR and SMEs

The HR Burden

HR teams often bear the brunt of the workload associated with employee turnover. From managing the recruitment process to handling exit interviews, the time and effort required can be substantial. Simplafy reduce the burden on HR with done-for-you comms and automated reporting fed back to leaders. 

The SME Challenge

For small and medium-sized enterprises (SMEs), the impact of employee turnover can be even more severe. Limited resources and a smaller talent pool can make it difficult to quickly replace key employees.

Taking a Proactive Approach to Retention

To mitigate these costs and maintain a high-performing workforce, organisations must prioritise employee retention. By investing in employee wellbeing, offering competitive compensation and benefits, and fostering a positive work environment, you can reduce turnover and boost productivity.

Key Retention Strategies

  • Regular Check-ins: Conduct frequent one-on-one meetings to address concerns and provide support.
  • Career Development Opportunities: Offer training, professional development and mentorship programs to help employees grow.
  • Flexible Work Arrangements: Implement flexible work options to improve work-life balance.
  • Recognition and Rewards: Acknowledge and reward employee contributions.
  • Mental Health Support: Provide access to mental health & wellbeing resources. 

Shaping Your Organisation's Future

By taking a proactiveapproach to employee retention, you can protect your bottom line, enhance yourcompany culture, and build a more resilient workforce, whilst better supportingthe wellbeing of employees in the modern workplace. Although having asuccessful retention strategy may come with a price tag, it will almostcertainly work out to be far less expensive than the steep financial cost of ahigh rate of employee turnover.

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Would you like to see a custom demo, or understand just how much Simplafy can save your business? Let’s chat.

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