The Outrageously High Price an Organisation Pays When Employees Leave

Many various factors contribute to why businesses work so hard to retain their employees. To begin, it usually costs anywhere from 1.5 to 2 times the departing employee’s annual salary to replace them.

However, there are hidden costs that should be considered. These expenses are in addition to those incurred by filling the position, training a replacement worker, and regaining lost productivity.

The bottom line and the company’s ethos might be profoundly affected by these unseen costs. Implementing the strategy is easier than you may think, and it has the potential to save a lot of resources (time, effort, and money). You should understand the cost of employee turnover also.

Why Does It Matter That Turnover Rates Be Kept to a Minimum?

A company’s first priority should be to reduce employee turnover. I will elaborate on why:

  • Employee turnover might have a negative effect on morale.
  • When workers see other employees leaving the organisation, they often ponder the motivations for the exits. The company’s morale and culture might suffer as a result of this introspection.
  • While it’s true that you can’t make every employee happy, you can make their work more bearable by removing the factors that make them want to leave.
  • Furthermore, companies with high turnover rates have a negative reputation in the field, making it harder to acquire competent workers.
  • Employee turnover is expensive for any business.
  • The true cost of staff turnover is difficult to pin down, but even the most optimistic projections present a bleak picture.

According to, it costs an average of $1,500 to hire and train a new hourly worker. For people in technical professions, it might be anywhere from 100% to 150% of their regular salary. If the individual is vying for a position at the C-suite level, the price might reach up to 213% of their yearly salary.

When there is a lot of turning over of staff, productivity goes down.

A new hire might take anywhere from one to two years to reach the same level of productivity as an experienced employee. Companies lose money when employees spend time acquiring new skills, getting used to new systems, and figuring out how to work effectively with their coworkers.

The loss of a team member may have an adverse effect on morale, leading to less output from the remaining workers. There is a risk of missing deadlines and an increase in the workload for other employees if the position is not filled during the recruitment process.

So, how much does it really cost to find a new worker?

If you want a thorough assessment of how much it will cost to replace an employee, you need to consider more than just the fee associated with advertising for and hiring a new staff member.

Expenses include advertising the position or hiring a recruiter, meeting with and hiring applicants, and then training those chosen.


Six to nine months’ salary is the estimated cost to replace an employee, according to a study by a Society for Human Resource Management chapter. To replace an individual making $60,000 per year would cost $45,000, including recruitment and training. However, there are further, less obvious effects, such as on the morale of your employees, the public’s perception of your company, and your productivity as an employer when training a new worker.