The Real Cost of Employee Turnover

A unique assessment model that makes employers aware of the costs of losing employees, how it affects a company’s profits and how a reduction in turnover costs can significantly lessen the financial impact on a company’s bottom line results.

Costs Associated with Turnover:

  • Total Separation Costs
  • Exit Interviews
  • Administrative Functions Associated with Termination
  • Costs from Unfilled Jobs
  • Total Replacement Costs
  • Pre- and post-employment administrative functions
  • Entrance interviews (internal)
  • Testing
  • Postemployment Expenses
  • Background and medical exams (internal and contracted)
  • Total Training Costs
  • Formal training program
  • Orientation
  • Preturnover Loss of Productivity
  • Revenue Loss from Unfilled Jobs
  • Loss of Productivity During OJT

A Cost of Turnover Analysis makes employers aware of these costs which can often escalate into thousands, and sometimes hundreds of thousands, of dollars. We can breakdown the cost of turnover by region, department and/or job function. We can also customize our model to meet the unique specifications of your company size, industry and business type.

Our Turnover Analysis not only draws attention to the company’s turnover costs today — we can project your Cost of Turnover in the future. By identifying your company’s turnover rate, we can project how much it will cost you ten years from now to fire someone. This is important as competition for business continues to increase at a rapid pace. You may not be able to project whether or not you will land a certain account, or project or how many widgets you will sell, but your costs of losing key employees is real and quantifiable. Therefore, unless have a 100% guarantee that your employees will be with you in 10 years, you need to be prudent in your projections by factoring in retention costs.

Our model will show also show you how turnover costs are affecting your current and future profits. For instance, from our calculations we can tell you how much additional revenue your company will have to make in order to compensate for escalating retention costs. Moreover, our strategic analysis can project how a decrease in turnover will stimulate profits and sales going forward. Armed with this data, you will be able to answer these questions:

  • Is it possible to grow my business x amount in order to compensate for retention costs?
  • How will I continue to meet customer demand if I keep losing employees to competitors?
  • How will my current employees react to cutbacks because of the escalating retention costs? How will this effect morale and productivity?


Did you know that:

  • Over 70% of all employees respond to competitors’ job offers during work hours?
  • Voluntary resignations are at the highest level in over 20 years?
  • Nearly 50% of all middle managers are either currently looking for another job or plan to do so?

Direct & Indirect Employee Turnover Costs. Which apply to your company?

Direct Costs:

Measurable impact on bottom line

  • Candidate Interviews (Multiple)
  • Candidate Screening
  • Candidate Testing
  • Employment Advertising
  • Employment Liability
  • Executive Search Fees
  • Exit Interviews
  • IT/Security Department Costs
  • Job Board Charges
  • Lost Training Expenses
  • New Hire Processing
  • New Hire Training
  • New Hire Orientation
  • Personnel Department Costs
  • Recruiter’s Salary
  • Recruiting Bonuses
  • Relocation Fees
  • Remaining Staff’s Overtime Pay
  • Separation Processing
  • Separation Pay

Indirect Costs:

Higher than Direct Costs but harder to quantify

  • Delay in Services/Production
  • Dissatisfied Customers
  • Employee Theft
  • Improper Use of Equipment
  • Inventory Anomalies
  • Job Errors
  • Lost Intellectual Capital
  • Lost Sales
  • Potentially Unrealized Sales
  • Reduced Billable Hours (From Declining Productivity)
  • Reduced Morale
  • Reduced Reputation

Cost of Lost Customers Due to:

  • Inexperienced Replacement Staff
  • Remaining Personnel are Overworked so they Underserve Clients causing them to go elsewhere to do business
  • Poaching by Departing Employees

Let’s face it, when employees are not happy with their current employment situation they usually do one of 2 things- work less or quit.

Retensa can help you calculate your cost of turnover today. Our consultants each have over 15 years experience in Organizational Development and know that each company has a unique culture and landscape depending upon the individuals who work there. They will work with you and your employees to identify your company’s best practices and leverage those strengths against any potential hurdles. In order to make your business the most productive, you need to know the strengths, concerns and aptitudes of your employees. After all, is it better to take the time and fill a vacancy once or haphazardly fill it repeatedly?

By answering a few questions on our website we can provide you with a rough estimate of your company’s retention costs and you can decide if you think this is something to invest some time towards.

Would you like to know how to get these results for your organization? YES.


Talk to a HR metrics expert. Request a free consultation now. Call us at (212) 545-1280 or email us here.