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Few people recognise the real costs of staff leaving, but they’re significant.

Apart from the direct recruitment costs (generally 1-3 months’ salary, depending on level), there are the hidden costs of lower productivity leading up to the departure of a staff member, and then while the replacement gets properly up to speed. Often, too, the new person is more expensive, so there are additional costs incurred here. Then there are costs such as those associated with productivity lost between a person leaving and the replacement starting, with equipping a new staff member for work and, of course, the loss of the “institutional knowledge” of the person leaving.

In fact, the overall costs can vary between 25% and as much as 400% of the overall salary package, depending on the role. And that’s before any hidden costs of an unhappy staff member giving customers a poor experience – something that can be very costly, indeed.

A study of UK businesses recently found that the leading cause for employees leaving is “bad management” with the top 4 issues being:

  • Unapproachable management
  • Poor communication
  • Aggressive behaviour
  • Bad listening skills

In fact, some 45% of the UK workforce have left a job for one, or more, of these reasons.

Conversely, managers who are seen as being hands-on, who have regular one-on-one meetings, give feedback and provide proper training for their staff have much lower rates of turnover and more productive workforces overall, as a result.

And, when you do lose a staff member, it’s critical to have an exit interview. This gives you the chance to find out what staff really think needs to be improved, so you can take appropriate action. Of course, if you’re the problem, they might not want to tell you, so it’s often a good idea to have an exit interview conducted by an outsider, too, particularly if turnover rates are high.

Have a critical look at your management team and how they interact with your staff – you could find ways to increase productivity and greatly reduce the costs associated with staff turnover.


#BusinessFitness #Motivation #Leadership #JobSatisfaction #Management


P.S. If you want to see what your staff turnover could be costing you, there’s a calculator available here – the results can be quite eye-opening.


Some of my other recent short posts related to this can be viewed here:

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