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How Much Does Employee Turnover Cost?

12th February 2020

Most people will know that employee turnover can cost their company significant amounts of money, but often people don’t realise that employee turnover can be expensive in more ways than purely due to the recruitment of new staff. This blog will outline all the costs of employee turnover and give you all of the facts so that you can see how it is truly impacting your company, as employee turnover in the UK costs £4 billion per year.

  1. Recruitment – When thinking of the costs of employee turnover this is the factor that springs into our minds most readily. On average in the UK the cost of employee turnover is £11,000 per person[1]. However, this can rise significantly with specialist or managerial positions. Recruitment covers the costs of consultants, outside agencies, interviewing and advertising the position. There is far more to recruiting than just interviewing candidates – it is a time consuming process with many little variables.
  2. Onboarding – When you consider the costs of recruitment, you need to also remember the costs of onboarding and training of new staff. Once you have chosen your new member of staff, it is time to train and induct them. The costs of training can be quite considerable, especially if you have outside agencies leading the sessions. Inducting the employee into your company can be time consuming too and therefore this can impact upon productivity, which can, in turn, become costly.
  3. Productivity – Staff turnover impacts on productivity in a few different ways. Firstly, due to onboarding and training it can be a while before the new employee becomes productive and even longer before they peak in productivity. On average it takes 8 months for a new employee to reach optimum productivity. Also, as a result of the recruitment process, productivity of a company is often lessened due to senior members of staff being required throughout recruitment, taking them away from their usual work.
  4. Employee Attitudes – One aspect of employee turnover which costs companies a lot of money, that many don’t expect, is that high turnover can lead to a decrease in employee satisfaction. When employees are not satisfied and happy at work their productivity decreases. A loss of productivity due to employee turnover can cost UK companies upwards of $400 billion per year.


Employee turnover can impact a company in ways you wouldn’t anticipate and can have a domino effect on costs. Working towards hiring the right staff and reducing turnover can save a company money in various areas of their business by increasing productivity, improving employee attitudes and reducing the need for recruitment and onboarding.


Filed in: Employee Turnover

About the Author:

Nikky van Bommel is the Marketing Director for Big 5 Assessments and has worked in the Psychometric Testing industry for over 10 years. Nikky is responsible for all marketing and social media for the organisation.

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